SUMITOMO METAL MINING CO., LTD. CSR Report 2014

CSR Report 2014

SUMITOMO METAL MINING CO., LTD.

Head Office: 11-3, Shimbashi 5-chome, Minato-ku, Tokyo 105-8716, Japan Tel: +81-3-3436-7705 Fax: +81-3-3434-2215 Website: http://www.smm.co.jp/E/

The following environmental considerations were applied to the printing of this report: SUMITOMO METAL MINING CO., LTD. • The report uses paper certified by the Forest Stewardship Council (FSC) and made with wood from FSC-certified forests. • The report is printed using vegetable oil-based ink Item Item CONTENTSProfile Indication Relevant Page(s) Profile Indication Relevant Page(s) Aspect: Occupational Health and Safety Number and description of significant disputes relating to land use, customary rights of Editorial Policy •••••••••••••••••••••••••••••••••• 2 MM6 local communities and Indigenous Peoples. Relations with Society (39) Percentage of total workforce represented in formal joint management–worker health and LA6 ADD Occupational Health and Safety (57-58) Editorial Policy Boundary of the Report safety committees that help monitor and advise on occupational health and safety programs. The extent to which grievance mechanisms were used to resolve disputes relating to land use, Interview with the President •••••••••••••••••••••• 3 MM7 Relations with Society (39) Rates of injury, occupational diseases, lost days, and absenteeism, and number of is report has beencustomary created rights for the of benefitlocal communities of customers, and Indigenous Peoples, andSumitomo the outcomes. Metal Mining Co., Ltd. (SMM) LA7 CORE Occupational Health and Safety (58) work-related fatalities by region. Overview of Business Operations •••••••••••••••• 5 citizensAspect: of Corruption local communities, shareholders, suppliers, The Sumitomo Metal Mining Group Education, training, counseling, prevention, and risk-control programs in place to assist LA8 CORE Occupational Health and Safety (57-58) workforce members, their families, or community members regarding serious diseases. employeesSO2 CORE and allPercentage other stakeholders. and total enumber intention of business was to units analyzed for risks related(consolidated to corruption. subsidiaries)Risk Management (76) Economic Aspects: SMM, consolidated subsidiaries LA9 ADD Health and safety topics covered in formal agreements with trade unions. — provide a clear outline of activities Sumitomo Metal Mining SO3 CORE Percentage of employees trained in organization’s anti-corruption policiesand affiliates and procedures. Compliance (75) SMM Group CSR Co., Ltd. (SMM) is pursuing in order to achieve sustainable Aspect: Training and Education SO4 CORE Actions taken in response to incidents of corruption. Environmental Aspects: SMMCompliance and consolidated (75) co-existence with society and the global environment. subsidiaries LA10 CORE Average hours of training per year per employee by employee category. People and Human Rights-related Data (50) Aspect: Public Policy Corporate Philosophy for a Sustainable Society ••• 7 e articles in this report focus on activities relating to the * From the perspective of significance, we included equity-method application Human Resources Development Initiatives (48) SO5 CORE Public policy positions and participation in public policy development and lobbying. Relations with Society (41) Programs for skills management and lifelong learning that support the continued “Six Key CSR Areas,” which were selected in 2008 after affiliate Nippon Ketjen Co., Ltd., but excluded consolidated subsidiaries with a SixLA11 KeyADD CSR Areas and Vision for 2020 ••••••••••• Initiatives Relating to Employee Diversity (49) employability of employees and assist them in managing career8 endings. Total value of financial and in-kind contributions to political parties, politicians,low environmental and relatedimpact. The following subsidiaries and affiliates have been People and Human Rights-related Data (50) threeSO6 monthsADD of deliberation in six workshops by an — institutions by country. covered. Some statements on Taganito HPAL Nickel Corporation have been CSR Promotion Framework •••••••••••••••••••••• made, but the company is not included in aggregate data as operations started LA12 ADD Percentage of employees receiving regular performance and career9 development reviews. — in-house group of 20 people comprising executive officers Aspect: Anti-competitive Behavior in January 2014. and general managers of Head Office divisions. eir OurAspect: Stakeholders Diversity and Equal••••••••••••••••••••••••••••••• Opportunity 10 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices SO7 ADD Igeta Heim Co., Ltd., SH Precision Co.,Compliance Ltd., SH Materials (75) Co., Ltd. selection was basedand on their the outcomes. impact those areas have on the Composition of governance bodies and breakdown of employees per category according to SMM Precision Co., Ltd., Ohkuchi Materials Co., Ltd. LA13 CORE People and Human Rights-related Data (50) gender, age group, minority group membership, and other indicators of diversity. companyAspect: Complianceand the extent of related social needs. To Ohkuchi Electronics Co., Ltd., JCO Co., Ltd., Shisaka Smelting Co., Ltd. Shinko Co., Ltd., Sumiko Kunitomi Denshi Co., Ltd., Sumiko Lubricant Co., Ltd. Special Feature 1: The History of the SMM Group ••• 11 determine those needs,Monetary we valueused insightof significant gained fines through and total number of non-monetary sanctions for LA14 CORE Ratio of basic salary of men to women by employee category. Initiatives Relating to Employee Diversity (49) SO8 CORE SumikoTec Co., Ltd., Sumiko LogisticsCompliance Co., Ltd., Sumitomo (75) Metal Mining non-compliance with laws and regulations. Engineering Co., Ltd. Sumitomo Metal Mining Siporex Co., Ltd., Special Feature 2: The Product Creation Spirit regular communication with stakeholders and information Human Rights Aspect: Resettlement Taihei Metal Industry Co., Ltd., Niihama Electronics Co., Ltd., from other sources (e.g. GRI* guidelines and other Niihama Materials Co., Ltd., Nittosha Co., Ltd., Nippon Ketjen Co., Ltd. Leading to the World’s Highest Level Performance •• 13 Initiatives in the Six Key CSR Areas: Number (and percentage) of company operating sites where artisanalJapan and Irradiation small-scale Service miningCo., Ltd., Hyuga Smelting Co., Ltd. Respect for People and Human Rights (45-46) internationalMM8 standards, and trends in civil society). For Coral Bay Nickel Corporation, MalaysianHuman SH Precision Rights Sdn. Initiatives Bhd. (47) Disclosure on Management Approach (ASM) takes place on, or adjacent to, the site Human Rights Initiatives (47) each of the Six Key CSR Areas, we have set a Vision for Malaysian SH Electronics Sdn. Bhd., Sumitomo Metal Mining Pogo LLC Relations with Suppliers (67-68) Sites where resettlements took place, the number of households resettledSumiko in Advanced each, andMaterials how (Suzhou) Co., Ltd. MM9 Human Rights Initiatives (47) Environmental & Social Aspects: 2020, and we createdtheir livelihoodsa roadmap werein 2008 affected that shows in the theprocess. SH Electronics Suzhou Co., Ltd., Suzhou SH Precision Co., Ltd. Aspect: Investment and Procurement Practices course to realize these visions. SH Electronics Chengdu Co., Ltd., SH Electronics Taiwan Co., Ltd. Aspect: Closure Planning Percentage and total number of significant investment agreements that include human rights InitiativesHR1 CORE in the Six Key CSR Areas Human Rights Initiatives (47) Against the backdrop of changing social situations, the clauses or that have undergone human rights screening. MM10 Number and percentage of operations with closure plans. Social Aspects: SMM and Relationsconsolidated with Society subsidiaries (39) Vision for 2020 and its roadmap were revised by the CSR Percentage of significant suppliers and contractors that have undergone screening on HR2 CORE Relations with Suppliers (67) human rights and actions taken. CommitteeProduct Responsibility in May 2012, when the 2012 3-Year Business Effective Use of Resources •••••••••••••••••••••• 15 Publication Date Total hours of employee training on policies and procedures concerning aspects of human Disclosure on Management Approach Relations with Customers (65-66) HR3 ADD Human Rights Initiatives (47) Plan was formulated. is is our report prepared in November 2014 rights that are relevant to operations, including the percentage of employees trained. Environmental Preservation ••••••••••••••••••••• 21 alignmentAspect: Customer with the HealthGRI Sustainability and Safety Reporting Previous publication: November 2013 Aspect: Non-discrimination Contribution to Society and Local Communities ••• 37 Guidelines at an Lifeapplication cycle stages level ofin whichA+. is health declaration and safety is impacts of products andNext services scheduled are assessed publication: for November 2015 PR1 CORE improvement, and percentage of significant products and services categories subject to such Relations with Customers (65-66) HR4 CORE Total number of incidents of discrimination and actions taken. Human Rights Initiatives (47) externally assured. Respect for People and Human Rights •••••••••••• procedures. Aspect: Freedom of Association and Collective Bargaining 45 * Global Reporting Initiative (GRI): An organization established with the Period Covered Total number of incidents of non-compliance with regulations and voluntary codes concerning Relations with Customers (65-66) purposePR2 ofADD creating and promoting international guidelines for Japan: April 1, 2013 - March 31, 2014 OccupationalOperations Health identified and Safetyin which the•••••••••••••••••• right to exercise freedom of association and collective health and safety impacts of products and services during their life cycle, by type of outcomes. Compliance (75) HR5 CORE 55 Relations with Employees (63) sustainability reports bargaining may be at significant risk, and actions taken to support these rights. Overseas: January 1, 2013 - December 31, 2013 Stakeholder Communication ••••••••••••••••••••• Aspect: Product and Service Labeling (Some activities before or after the above period have Aspect: Child Labor 61 Type of product and service information required by procedures, andalso percentage been included) of significant Operations identified as having significant risk for incidents of child labor, and measures PR3 CORE Relations with Customers (66) HR6 CORE Human Rights Initiatives (47) products and services subject to such information requirements. taken to contribute to the elimination of child labor. Total number of incidents of non-compliance with regulations and voluntaryReferenced codes concerning Guidelines EconomicAspect: Forced and Aspects Compulsory Labor PR4 ADD Relations with Customers (66) product and service information and labeling, by type of outcomes.GRI Sustainability Reporting Guidelines, Version 3.0 Operations identified as having significant risk for incidents of forced or compulsory labor, Practices related to customer satisfaction, including results of surveys measuring customer HR7 CORE Human Rights Initiatives (47) PR5 ADD Environmental Reporting GuidelinesRelations with of the Customers Japanese (66) and measures to contribute to the elimination of forced or compulsory labor. satisfaction. Strengthening Economic Ties with Stakeholders ••• 71 Ministry of the Environment (2012 version) Aspect: Security Practices Aspect: Marketing Communications Unless otherwise stated, the term ‘ton’ refers to a metric ton. Percentage of security personnel trained in the organization’s policies or procedures Programs for adherence to laws, standards, and voluntary codes related to marketing HR8 ADD — PR6 CORE Relations with Customers (65-66) Corporateconcerning Governance aspects of human and rights Management that are relevant to operations. communications, including advertising, promotion, and sponsorship. Aspect: Indigenous Rights Total number of incidents of non-compliance with regulations and voluntaryEnquiries codes concerning Aspects PR7 ADD marketing communications, including advertising, promotion, and sponsorshipPR & IR Department, by type of SumitomoRelations Metal with Mining Customers Co., (66)Ltd. HR9 ADD Total number of incidents of violations involving rights of indigenous people and actions taken. — outcomes. 11-3, Shimbashi 5-chome, Minato-ku, Tokyo 105-8716, Total number of operations taking place in or adjacent to Indigenous Peoples’ territories, MM5 and number and percentage of operations or sites where there are formal agreements with Relations with Society (39-40) Aspect: Customer Privacy Japan Corporate GovernanceIndigenous Peoples’•••••••••••••••••••••••••• communities. 73 Total number of substantiated complaints regarding breaches of customerTel: 81-3-3436-7705 privacy and Fax: 81-3-3434-2215 PR8 ADD — losses of customer data. ComplianceSociety •••••••••••••••••••••••••••••••••••• 75 Aspect: Compliance Initiatives in the Six Key CSR Areas: Photographs on This Page ••••••••••••••••••••••••••••••• Risk Management 76 Contribution to Society and Local Monetary value of significant fines for noncompliance with laws andTaganito regulations HPAL concerning Nickel Opening Ceremony PR9 CORE Relations with Customers (66) Disclosure on Management Approach Communities (37-38) the provision and use of products and services. Built under the Taganito Project being promoted on Relations with Society (39) Risk Management (76) Aspect: Materials Stewardship Mindanao Island in the Philippines, the HPAL plant was completed and an opening ceremony held locally on SMM’sAspect: Community Responses to Stakeholder Opinions ••• 77 Initiatives in the Six Key CSR Areas: September 2013. The ceremonyEffective was Use widely of Resources attended (15-16) by Nature, scope, and effectiveness of any programs and practices that assess and manage SO1 CORE Relations with Society (39) MM11 Programs and progress relating to materials stewardship. representatives from the PhilippinesInitiatives ingovernment, Creating Products local with Low the impacts of operations on communities, including entering, operating, and exiting. Environmental Impact (32) Independent Assurance Report •••••••••••• 78 government, and the constructionRelations work. with Customers (65-66)

GRI Content Index ••••••••••••••••••••••••••• 79

0183SUMITOMOSUMITOMO METAL METAL MINING MINING CO., CO.,LTD. LTD. CSR CSRReport Report 2014 2014 SUMITOMOSUMITOMO METAL METAL MINING MINING CO., CO.,LTD. LTD.CSR CSRReport Report 2014 201402 84 CONTENTS

Editorial Policy •••••••••••••••••••••••••••••••••• 2 Editorial Policy Boundary of the Report Interview with the President •••••••••••••••••••••• 3 is report has been created for the benefit of customers, Sumitomo Metal Mining Co., Ltd. (SMM) Overview of Business Operations •••••••••••••••• 5 citizens of local communities, shareholders, suppliers, The Sumitomo Metal Mining Group employees and all other stakeholders. e intention was to (consolidated subsidiaries) provide a clear outline of activities Sumitomo Metal Mining Economic Aspects: SMM, consolidated subsidiaries and affiliates SMM Group CSR Co., Ltd. (SMM) is pursuing in order to achieve sustainable Environmental Aspects: SMM and consolidated co-existence with society and the global environment. subsidiaries Corporate Philosophy for a Sustainable Society ••• 7 e articles in this report focus on activities relating to the * From the perspective of significance, we included equity-method application “Six Key CSR Areas,” which were selected in 2008 after affiliate Nippon Ketjen Co., Ltd., but excluded consolidated subsidiaries with a Six Key CSR Areas and Vision for 2020 ••••••••••• 8 low environmental impact. The following subsidiaries and affiliates have been three months of deliberation in six workshops by an covered. Some statements on Taganito HPAL Nickel Corporation have been CSR Promotion Framework •••••••••••••••••••••• 9 in-house group of 20 people comprising executive officers made, but the company is not included in aggregate data as operations started in January 2014. Our Stakeholders ••••••••••••••••••••••••••••••• 10 and general managers of Head Office divisions. eir selection was based on the impact those areas have on the Igeta Heim Co., Ltd., SH Precision Co., Ltd., SH Materials Co., Ltd. SMM Precision Co., Ltd., Ohkuchi Materials Co., Ltd. company and the extent of related social needs. To Ohkuchi Electronics Co., Ltd., JCO Co., Ltd., Shisaka Smelting Co., Ltd. ••• Shinko Co., Ltd., Sumiko Kunitomi Denshi Co., Ltd., Sumiko Lubricant Co., Ltd. Special Feature 1: The History of the SMM Group 11 determine those needs, we used insight gained through SumikoTec Co., Ltd., Sumiko Logistics Co., Ltd., Sumitomo Metal Mining regular communication with stakeholders and information Engineering Co., Ltd. Sumitomo Metal Mining Siporex Co., Ltd., Special Feature 2: The Product Creation Spirit Taihei Metal Industry Co., Ltd., Niihama Electronics Co., Ltd., from other sources (e.g. GRI* guidelines and other Niihama Materials Co., Ltd., Nittosha Co., Ltd., Nippon Ketjen Co., Ltd. Leading to the World’s Highest Level Performance •• 13 Japan Irradiation Service Co., Ltd., Hyuga Smelting Co., Ltd. international standards, and trends in civil society). For Coral Bay Nickel Corporation, Malaysian SH Precision Sdn. Bhd. each of the Six Key CSR Areas, we have set a Vision for Malaysian SH Electronics Sdn. Bhd., Sumitomo Metal Mining Pogo LLC Sumiko Advanced Materials (Suzhou) Co., Ltd. Environmental & Social Aspects: 2020, and we created a roadmap in 2008 that shows the SH Electronics Suzhou Co., Ltd., Suzhou SH Precision Co., Ltd. course to realize these visions. SH Electronics Chengdu Co., Ltd., SH Electronics Taiwan Co., Ltd. Initiatives in the Six Key CSR Areas Against the backdrop of changing social situations, the Social Aspects: SMM and consolidated subsidiaries Vision for 2020 and its roadmap were revised by the CSR Committee in May 2012, when the 2012 3-Year Business Effective Use of Resources •••••••••••••••••••••• 15 Publication Date Plan was formulated. is is our report prepared in November 2014 Environmental Preservation ••••••••••••••••••••• 21 alignment with the GRI Sustainability Reporting Previous publication: November 2013 Contribution to Society and Local Communities ••• 37 Guidelines at an application level of A+. is declaration is Next scheduled publication: November 2015 externally assured. Respect for People and Human Rights •••••••••••• 45 * Global Reporting Initiative (GRI): An organization established with the Period Covered purpose of creating and promoting international guidelines for Japan: April 1, 2013 - March 31, 2014 Occupational Health and Safety •••••••••••••••••• 55 sustainability reports Overseas: January 1, 2013 - December 31, 2013 Stakeholder Communication ••••••••••••••••••••• 61 (Some activities before or after the above period have also been included)

Economic Aspects Referenced Guidelines GRI Sustainability Reporting Guidelines, Version 3.0 Environmental Reporting Guidelines of the Japanese Strengthening Economic Ties with Stakeholders ••• 71 Ministry of the Environment (2012 version)

Unless otherwise stated, the term ‘ton’ refers to a metric ton. Corporate Governance and Management Enquiries Aspects PR & IR Department, Sumitomo Metal Mining Co., Ltd. 11-3, Shimbashi 5-chome, Minato-ku, Tokyo 105-8716, Japan Corporate Governance •••••••••••••••••••••••••• 73 Tel: 81-3-3436-7705 Fax: 81-3-3434-2215 Compliance •••••••••••••••••••••••••••••••••••• 75 Photographs on This Page Risk Management ••••••••••••••••••••••••••••••• 76 Taganito HPAL Nickel Opening Ceremony Built under the Taganito Project being promoted on Mindanao Island in the Philippines, the HPAL plant was SMM’s Responses to Stakeholder Opinions ••• 77 completed and an opening ceremony held locally on September 2013. The ceremony was widely attended by representatives from the Philippines government, local Independent Assurance Report •••••••••••• 78 government, and the construction work.

GRI Content Index ••••••••••••••••••••••••••• 79

01 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 02 shall place “prime importance on integrity,” and focus even The Sumitomo Business Spirit is there to support us with those Becoming a world leader in non-ferrous metals more on building relationships of trust with local communities. decisions and actions. It is more than just a slogan. I look at it as Interview To help us do that, not only are we continuing efforts in a backbone, a trunk around which employees of the SMM with and an excellent company of Japan through development and operations to achieve zero environmental Group mold their conduct, helping to shape the most contamination and minimize negative impacts, we are fundamental aspects of their character. I, too, am constantly the President the ongoing effects of all employees advancing initiatives that will contribute to regional learning from the history of Sumitomo as I go about my job and development over the long term, such as promotion of the Sumitomo Business Spirit is so profound that I am still only thinking hard before taking action employment, improvement of facilities at schools, hospitals and halfway toward fully understanding it, gradually coming to other infrastructure, and development of human resources terms with the various aspects. The Sumitomo Business Spirit through scholarship programs. Knowing that mining, smelting does not only refer to those things that can be explained in Yoshiaki Nakazato and refining are all long-term businesses which span several words. For example, the vicinity of the old Besshi Copper decades, and in particular that in emerging nations SMM’s Mine̶formerly run by the Sumitomo family then finally taken President and Representative Director businesses are a form of community development, I view it is as over and closed by SMM̶has been restored to its natural state, our duty to develop alongside the community. so much so that it is hard to imagine there was once a town there where many people who worked at the mine lived. This was achieved through the efforts of our forerunners who What is the current status of the 2012 3-Year practiced the principle, included in the Sumitomo Business Q3 Business Plan and what is the outlook? Spirit, of paying back nature with gratitude for its bounties through reforestation and other measures. As the saying goes, it In the 2012 3-Year Business Plan, we have put forward is far better to see with your own eyes, and so the fact that this A becoming a world leader in the non-ferrous metals legacy remains for us to witness makes it a very valuable asset industry and an excellent company of Japan as a vision indeed. for the SMM Group. Our biggest challenges in realizing this vision are surely the Taganito HPAL project and the Sierra Do you have a message for employees? Gorda copper mine development project. Q5 Taganito HPAL, which has moved into full production, will demonstrate our advanced capabilities in project execution. An important task for SMM, as a manufacturing Meanwhile, the Sierra Gorda copper mine development project, A company, besides enhancing capabilities of employees in Chile, aims to start commercial production by the end of the in the areas of technology and sales, is to improve the year. This will serve as a touchstone to prove that SMM has the quality of management sustaining those capabilities. To do that, ability to take a major share and carry out development through we certainly need an environment that allows each and every to management of copper mines around the world in the future. employee to dynamically engage in their works. In that sense, We are advancing these projects as top management priorities. employees are extremely important stakeholders. In addition, through restructuring and advancement of a Sumitomo Metal Mining teams up with people in local growth strategy in the materials business, I hope that we can communities to develop mines, produce high-quality metals firmly establish SMM’s position as a globally unique multiple from ores using advanced technology, and create metal business company with mineral resources, smelting & refining, materials that are put to use in all kinds of scenarios right and materials as its three core businesses. across society. It is a business filled with so many different And as we start drawing up the 2015 3-Year Business Plan, elements bringing excitement to all those involved. Please don’t we plan to review our Vision for 2020—the future state of SMM be content with concentrating on your own job. Make more of went smoothly, in contrast to global competitors, is one defined under the Six Key CSR Areas—by examining the gap an effort to talk, and even make a point of engaging in small Considering conditions in society as a example demonstrating our on-site strengths. between the vision and our current state and revising it to talk, with the people around you, including people in other Q1 whole, what do you perceive are the issues So that the SMM Group can continue to contribute to society include specifics and make it easier to understand. One thing divisions, and broaden your horizons. And by doing so, gain a that the SMM Group needs to address? by exercising its on-site strengths, I think it will be important for the SMM Group has adhered to consistently is our stance of fresh understanding of the bigger picture. each and every employee to develop a habit of thinking hard contributing to society through our own business. Rather than The very ability of each and every employee to think before Close to 50 years have passed since American economist about why their work is necessary and what they should do carry out CSR activities especially, we will look to realize our they act is both a valuable asset and a lifeline for SMM. In A Kenneth E. Boulding warned that if we went on next, based on an understanding about the relevance of their vision by focusing on the Six Key CSR Areas within our steady deciding how to act, I would like you, as individual members of consuming fossil fuels the way we were, Spaceship Earth work to society. implementation of 3-year business plans. the SMM Group, to constantly consider what others will think was headed for collapse. Absolutely nothing has changed. In and what is expected of you. fact, the situation is now much worse. In the mineral resources and smelting & refining businesses, too, we are up against an What is important when undertaking even greater number of challenges than in the past, as seen by Q2 business in emerging nations? What do you wish to instill to employees the deterioration of ore quality and the increase in Q4 as the essence of CSR? hard-to-process ores caused a strained supply of metal In some countries, we are seeing a new trend toward resources. A “resource nationalism,” an example being Indonesia’s I think the essence of CSR comes down to the actions We, the SMM Group, certainly have a role to play in new mining law, effective since January 2014, which A that employees ordinarily choose to take as individual contributing to the resolution of these social issues through our prohibits exports of unprocessed ore. In light of this trend, I human beings and individual members of the SMM core business. Already we have been working to lower our believe there is now an even greater need to build solid Group. That simultaneously requires the development of environmental impact, for example through use of low-grade relationships of trust between countries and regions in a vision for businesses and a corporate culture that are nickel ore, recovery of rare metals, and a focus, in the materials possession of resources and those like us, who carry out characteristic of Sumitomo Metal Mining. It is important that business, on the environment and energy fields. These efforts development and operate in those places. Having the trust of employees have contact with society and readily engage in were possible due to our advanced capabilities, specifically in the local community is a major prerequisite to a region granting communication with people around them, and by doing so regard to technology on site, and our salespersons. us permission to operate a mine, smelter or refinery there. I come to understand and sympathize with others, and to share The fact that our commercial application of high-pressure acid strongly feel that we need to return to the principles of the and resonate with others, while constantly thinking about how leaching (HPAL) technology for processing low-grade nickel ore Sumitomo Business Spirit, which begins by declaring Sumitomo they should act.

03 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 04 shall place “prime importance on integrity,” and focus even The Sumitomo Business Spirit is there to support us with those Becoming a world leader in non-ferrous metals more on building relationships of trust with local communities. decisions and actions. It is more than just a slogan. I look at it as Interview To help us do that, not only are we continuing efforts in a backbone, a trunk around which employees of the SMM with and an excellent company of Japan through development and operations to achieve zero environmental Group mold their conduct, helping to shape the most contamination and minimize negative impacts, we are fundamental aspects of their character. I, too, am constantly the President the ongoing effects of all employees advancing initiatives that will contribute to regional learning from the history of Sumitomo as I go about my job and development over the long term, such as promotion of the Sumitomo Business Spirit is so profound that I am still only thinking hard before taking action employment, improvement of facilities at schools, hospitals and halfway toward fully understanding it, gradually coming to other infrastructure, and development of human resources terms with the various aspects. The Sumitomo Business Spirit through scholarship programs. Knowing that mining, smelting does not only refer to those things that can be explained in Yoshiaki Nakazato and refining are all long-term businesses which span several words. For example, the vicinity of the old Besshi Copper decades, and in particular that in emerging nations SMM’s Mine̶formerly run by the Sumitomo family then finally taken President and Representative Director businesses are a form of community development, I view it is as over and closed by SMM̶has been restored to its natural state, our duty to develop alongside the community. so much so that it is hard to imagine there was once a town there where many people who worked at the mine lived. This was achieved through the efforts of our forerunners who What is the current status of the 2012 3-Year practiced the principle, included in the Sumitomo Business Q3 Business Plan and what is the outlook? Spirit, of paying back nature with gratitude for its bounties through reforestation and other measures. As the saying goes, it In the 2012 3-Year Business Plan, we have put forward is far better to see with your own eyes, and so the fact that this A becoming a world leader in the non-ferrous metals legacy remains for us to witness makes it a very valuable asset industry and an excellent company of Japan as a vision indeed. for the SMM Group. Our biggest challenges in realizing this vision are surely the Taganito HPAL project and the Sierra Do you have a message for employees? Gorda copper mine development project. Q5 Taganito HPAL, which has moved into full production, will demonstrate our advanced capabilities in project execution. An important task for SMM, as a manufacturing Meanwhile, the Sierra Gorda copper mine development project, A company, besides enhancing capabilities of employees in Chile, aims to start commercial production by the end of the in the areas of technology and sales, is to improve the year. This will serve as a touchstone to prove that SMM has the quality of management sustaining those capabilities. To do that, ability to take a major share and carry out development through we certainly need an environment that allows each and every to management of copper mines around the world in the future. employee to dynamically engage in their works. In that sense, We are advancing these projects as top management priorities. employees are extremely important stakeholders. In addition, through restructuring and advancement of a Sumitomo Metal Mining teams up with people in local growth strategy in the materials business, I hope that we can communities to develop mines, produce high-quality metals firmly establish SMM’s position as a globally unique multiple from ores using advanced technology, and create metal business company with mineral resources, smelting & refining, materials that are put to use in all kinds of scenarios right and materials as its three core businesses. across society. It is a business filled with so many different And as we start drawing up the 2015 3-Year Business Plan, elements bringing excitement to all those involved. Please don’t we plan to review our Vision for 2020—the future state of SMM be content with concentrating on your own job. Make more of went smoothly, in contrast to global competitors, is one defined under the Six Key CSR Areas—by examining the gap an effort to talk, and even make a point of engaging in small Considering conditions in society as a example demonstrating our on-site strengths. between the vision and our current state and revising it to talk, with the people around you, including people in other Q1 whole, what do you perceive are the issues So that the SMM Group can continue to contribute to society include specifics and make it easier to understand. One thing divisions, and broaden your horizons. And by doing so, gain a that the SMM Group needs to address? by exercising its on-site strengths, I think it will be important for the SMM Group has adhered to consistently is our stance of fresh understanding of the bigger picture. each and every employee to develop a habit of thinking hard contributing to society through our own business. Rather than The very ability of each and every employee to think before Close to 50 years have passed since American economist about why their work is necessary and what they should do carry out CSR activities especially, we will look to realize our they act is both a valuable asset and a lifeline for SMM. In A Kenneth E. Boulding warned that if we went on next, based on an understanding about the relevance of their vision by focusing on the Six Key CSR Areas within our steady deciding how to act, I would like you, as individual members of consuming fossil fuels the way we were, Spaceship Earth work to society. implementation of 3-year business plans. the SMM Group, to constantly consider what others will think was headed for collapse. Absolutely nothing has changed. In and what is expected of you. fact, the situation is now much worse. In the mineral resources and smelting & refining businesses, too, we are up against an What is important when undertaking even greater number of challenges than in the past, as seen by Q2 business in emerging nations? What do you wish to instill to employees the deterioration of ore quality and the increase in Q4 as the essence of CSR? hard-to-process ores caused a strained supply of metal In some countries, we are seeing a new trend toward resources. A “resource nationalism,” an example being Indonesia’s I think the essence of CSR comes down to the actions We, the SMM Group, certainly have a role to play in new mining law, effective since January 2014, which A that employees ordinarily choose to take as individual contributing to the resolution of these social issues through our prohibits exports of unprocessed ore. In light of this trend, I human beings and individual members of the SMM core business. Already we have been working to lower our believe there is now an even greater need to build solid Group. That simultaneously requires the development of environmental impact, for example through use of low-grade relationships of trust between countries and regions in a vision for businesses and a corporate culture that are nickel ore, recovery of rare metals, and a focus, in the materials possession of resources and those like us, who carry out characteristic of Sumitomo Metal Mining. It is important that business, on the environment and energy fields. These efforts development and operate in those places. Having the trust of employees have contact with society and readily engage in were possible due to our advanced capabilities, specifically in the local community is a major prerequisite to a region granting communication with people around them, and by doing so regard to technology on site, and our salespersons. us permission to operate a mine, smelter or refinery there. I come to understand and sympathize with others, and to share The fact that our commercial application of high-pressure acid strongly feel that we need to return to the principles of the and resonate with others, while constantly thinking about how leaching (HPAL) technology for processing low-grade nickel ore Sumitomo Business Spirit, which begins by declaring Sumitomo they should act.

03 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 04 Introducing Business Operations

Overview of Business Operations

Corporate Data SMM Group Business Locations (As of July 1, 2014)

Company name: Sumitomo Metal Mining Co., Ltd. Main Facilities Head Office: 11-3, Shimbashi 5-chome, Minato-ku, Tokyo Hishikari Mine Pogo Mine (85.0%) President: Yoshiaki Nakazato (Shimbashi Sumitomo Building) Harima Smelter Main branch: Osaka Branch Toyo Smelter & Refinery Founded: 1590 Niihama Nickel Refinery Branches: Nagoya Branch, Besshi-Niihama District Division Shisaka Smelting Co., Ltd. (100.0%) Incorporated: 1950 (Ehime Prefecture) Hyuga Smelting Co., Ltd. (60.0%) Capital: ¥93.2 billion Plants: Toyo Smelter & Refinery (Ehime Prefecture) Niihama Nickel Refinery (Ehime Prefecture) Listings: Tokyo Stock Exchange Harima Smelter (Hyogo Prefecture) Morenci (12.0%) No. of consolidated subsidiaries1: 66 Ome District Division (Tokyo) Jinlong Copper Co., Ltd. (27.1%) Sagami Plant (Kanagawa Prefecture) No. of equity-method affiliates1: 16 Isoura Plant (Ehime Prefecture) Mine: Hishikari Mine (Kagoshima Prefecture) Coral Bay Nickel Corporation (54.0%) No. of employees (consolidated)1, 2: 8,628 (764) Taganito HPAL Nickel Corporation (62.5%) Research centers: Ichikawa Research Laboratories (Chiba Prefecture) Net sales (consolidated)1: ¥830.5 billion Niihama Research Laboratories (Ehime Prefecture) Sorowako (20.1%) Cerro Verde (16.8%) 1 Battery Research Laboratories (Ehime Prefecture) Recurring profit (consolidated) : ¥114.4 billion Materials Research & Development Center (Tokyo) Figesbal (25.5%) Main Products Batu Hijau (3.5%) Sierra Gorda (31.5%) 1. Mineral resources segment: Ojos del Salado (16.0%) 1. As of March 31, 2014 Gold and silver ore, copper concentrates, copper, gold 2. The number of full-time employees. The average number of Goro (7.6%) Candelaria (16.0%) additional temporary staff during the year is shown in 2. Smelting & refining segment: Copper, gold, silver, electrolytic nickel, ferro-nickel, zinc, chemical parentheses. : Mineral Resources (SMM’s interest*) products : Smelting & Refining Northparkes (13.3%) 3. Materials segment: (SMM’s investment*) Semiconductor materials, thick film materials, thin film materials, * Rounded to 1 decimal place battery materials, crystal materials, magnetic materials, oil refining catalysts, automotive catalysts, autoclaved lightweight concrete, lubricants Japan Asia North America No. of countries and regions where business is conducted: 16 Sumitomo Metal Mining Co., Ltd. Mineral Resources Mineral Resources ● Cordillera Exploration Co., Inc. ■ SMMA Candelaria Inc. (U.S.) ■ Consolidated Net Sales (Billion yen) ■ Net Sales by Region (Million Yen) Mineral Resources (Philippines) ■ SMM Exploration Corporation (U.S.) ■ Sumiko Resources Exploration & ■ Sumitomo Metal Mining America Inc. (U.S.) North America (8.5%) Development Co., Ltd. Smelting & Refining ■ Sumitomo Metal Mining Arizona Inc. (U.S.) 1,000 Other (1.5%) ● ■ Sumiko Solomon Exploration Co., Ltd. Jinlong Copper Co., Ltd. (China) ■ Sumitomo Metal Mining Pogo LLC (U.S.) 70,922 11,986 ■ Sumitomo Metal Mining Management ■ Stone Boy Inc. (U.S.) 864.1 (Shanghai) Co., Ltd. (China) 847.9 830.5 Smelting & Refining ■ Sumitomo Metal Mining Canada Ltd. 808.5 Southeast Asia ● ■ 800 Acids Co., Ltd. Coral Bay Nickel Corporation (Philippines) (Canada) (9.3%) ● ● 725.8 MS Zinc Co., Ltd. Nickel Asia Corporation (Philippines) ■ SMM Resources Ltd. (Canada) ■ ■ 77,489 Shisaka Smelting Co., Ltd. Taganito HPAL Nickel Corporation ■ Sumac Mines Ltd. (Canada) ■ Sumiko Logistics Co., Ltd. (Philippines) 600 ■ Taihei Metal Industry Co., Ltd. ■ Sumitomo Metal Mining Philippine Holdings Total ■ Hyuga Smelting Co., Ltd. Corporation (Philippines) 830,546 ● Mitsui Sumitomo Metal Mining Brass ● P.T. Vale Indonesia Tbk (Indonesia) 400 & Copper Co., Ltd. Other Regions East Asia (20.7%) Materials 171,692 Japan ■ Dongguan Sumiko Electronic Paste Co., Materials Mineral Resources (60.0%) ● SH Copper Products, Co. Ltd. Ltd. (China) ● Compañia Contractual Minera Candelaria 200 498,457 ■ SH Precision Co., Ltd. ■ Shanghai Sumiko Electronic Paste Co., Ltd. (Chile) ■ SH Materials Co., Ltd. (China) ● Compañia Contractual Minera Ojos del ■ SMM Precision Co., Ltd. ■ SH Electronics Suzhou Co., Ltd. (China) Salado (Chile) ● ■ 0 N.E. Chemcat Corporation Suzhou SH Precision Co., Ltd. (China) ■ Sumitomo Metal Mining Chile Ltda. (Chile) ■ ■ 2009 2010 2011 2012 2013 (FY) Ohkuchi Electronics Co., Ltd. Sumiko Advanced Materials (Suzhou) Co., ■ SMM Sierra Gorda Inversiones Ltda. (Chile) ■ Ohkuchi Materials Co., Ltd. Ltd. (China) ● Sierra Gorda S.C.M. (Chile) ● ■ Granopt Co., Ltd. SH Electronics Chengdu Co., Ltd. (China) ■ SMM-SG Holdings Inversiones Ltda. (Chile) ■ ■ ■ Consolidated Recurring Profit/Consolidated Net Income (Billion yen) ■ Number of Officers/Employees by Region Shinko Co., Ltd. SH Precision Chengdu Co., Ltd. (China) ■ Sumitomo Metal Mining Peru S.A. (Peru) ■ ■ Sumiko Kunitomi Denshi Co., Ltd. Sumico Lubricant Trading (Shanghai) Co., ● Sociedad Minera Cerro Verde S.A.A. (Peru) ■ Other (1.4%) Sumiko Lubricant Co., Ltd. Ltd. (China) ■ Sumitomo Metal Mining do Brasil Ltda. ■ SumikoTec Co., Ltd. ■ Consolidated net income 137 Taiwan Sumiko Materials Co., Ltd. (Taiwan) (Brazil) 150 North America (3.6%) ■ ■ Sumitomo Metal Mining Siporex Co., SH Electronics Taiwan Co., Ltd. (Taiwan) ■ Consolidated recurring profit 335 Sumitomo Metal Mining Oceania Pty. Ltd. Ltd. ■ SMM KOREA Co., Ltd. (South Korea) (Australia) ■ Niihama Electronics Co., Ltd. ■ Malaysian Electronics Materials Sdn. Bhd. 123.7 East Asia (13.8%) ■ SMM Cerro Verde Netherlands B.V. ■ Niihama Materials Co., Ltd. (Malaysia) 115.0 114.4 (Netherlands) 1,295 ■ ■ 108.8 Nittosha Co., Ltd. Malaysian SH Electronics Sdn. Bhd. ■ SMM Solomon Ltd. (Solomon Islands) ● Nippon Ketjen Co., Ltd. 100 (Malaysia) ■ Malaysian SH Precision Sdn. Bhd. 87.8 Total Smelting & Refining 84.0 86.6 Other (Malaysia) ● Figesbal S.A. (New Caledonia) 80.3 9,412 ■ Igeta Heim Co., Ltd. ■ SH Asia Pacific Pte. Ltd. (Singapore) ■ Sumic Nickel Netherlands B.V. (Netherlands) ■ Southeast Asia JCO Co., Ltd. ■ Sumiko Tape Materials Singapore Pte. Ltd. 65.3 Japan ■ 54.0 (17.5%) Sumiko Technical Service Co., Ltd. (Singapore) Other Businesses (63.7%) ■ ■ 50 1,650 Sumiko Techno-Research Co., Ltd. ■ Sumiko Leadframe (Thailand) Co., Ltd. SMM Holland B.V. (Netherlands) 5,995 ■ Sumiko Plantech Co., Ltd. (Thailand) ■ Sumitomo Metal Mining Engineering Co., Ltd. SMM ■ Japan Irradiation Service Co., Ltd. ■ Consolidated subsidiaries ● Equity-method affiliates

0 * As of March 31, 2014. “Number of officers/employees by region” does not 2009 2010 2011 2012 2013 (FY) match “No. of employees (consolidated)” as it includes full-time officers, non-regular and limited-term employees. 05 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 06 Introducing Business Operations

Overview of Business Operations

Corporate Data SMM Group Business Locations (As of July 1, 2014)

Company name: Sumitomo Metal Mining Co., Ltd. Main Facilities Head Office: 11-3, Shimbashi 5-chome, Minato-ku, Tokyo Hishikari Mine Pogo Mine (85.0%) President: Yoshiaki Nakazato (Shimbashi Sumitomo Building) Harima Smelter Main branch: Osaka Branch Toyo Smelter & Refinery Founded: 1590 Niihama Nickel Refinery Branches: Nagoya Branch, Besshi-Niihama District Division Shisaka Smelting Co., Ltd. (100.0%) Incorporated: 1950 (Ehime Prefecture) Hyuga Smelting Co., Ltd. (60.0%) Capital: ¥93.2 billion Plants: Toyo Smelter & Refinery (Ehime Prefecture) Niihama Nickel Refinery (Ehime Prefecture) Listings: Tokyo Stock Exchange Harima Smelter (Hyogo Prefecture) Morenci (12.0%) No. of consolidated subsidiaries1: 66 Ome District Division (Tokyo) Jinlong Copper Co., Ltd. (27.1%) Sagami Plant (Kanagawa Prefecture) No. of equity-method affiliates1: 16 Isoura Plant (Ehime Prefecture) Mine: Hishikari Mine (Kagoshima Prefecture) Coral Bay Nickel Corporation (54.0%) No. of employees (consolidated)1, 2: 8,628 (764) Taganito HPAL Nickel Corporation (62.5%) Research centers: Ichikawa Research Laboratories (Chiba Prefecture) Net sales (consolidated)1: ¥830.5 billion Niihama Research Laboratories (Ehime Prefecture) Sorowako (20.1%) Cerro Verde (16.8%) 1 Battery Research Laboratories (Ehime Prefecture) Recurring profit (consolidated) : ¥114.4 billion Materials Research & Development Center (Tokyo) Figesbal (25.5%) Main Products Batu Hijau (3.5%) Sierra Gorda (31.5%) 1. Mineral resources segment: Ojos del Salado (16.0%) 1. As of March 31, 2014 Gold and silver ore, copper concentrates, copper, gold 2. The number of full-time employees. The average number of Goro (7.6%) Candelaria (16.0%) additional temporary staff during the year is shown in 2. Smelting & refining segment: Copper, gold, silver, electrolytic nickel, ferro-nickel, zinc, chemical parentheses. : Mineral Resources (SMM’s interest*) products : Smelting & Refining Northparkes (13.3%) 3. Materials segment: (SMM’s investment*) Semiconductor materials, thick film materials, thin film materials, * Rounded to 1 decimal place battery materials, crystal materials, magnetic materials, oil refining catalysts, automotive catalysts, autoclaved lightweight concrete, lubricants Japan Asia North America No. of countries and regions where business is conducted: 16 Sumitomo Metal Mining Co., Ltd. Mineral Resources Mineral Resources ● Cordillera Exploration Co., Inc. ■ SMMA Candelaria Inc. (U.S.) ■ Consolidated Net Sales (Billion yen) ■ Net Sales by Region (Million Yen) Mineral Resources (Philippines) ■ SMM Exploration Corporation (U.S.) ■ Sumiko Resources Exploration & ■ Sumitomo Metal Mining America Inc. (U.S.) North America (8.5%) Development Co., Ltd. Smelting & Refining ■ Sumitomo Metal Mining Arizona Inc. (U.S.) 1,000 Other (1.5%) ● ■ Sumiko Solomon Exploration Co., Ltd. Jinlong Copper Co., Ltd. (China) ■ Sumitomo Metal Mining Pogo LLC (U.S.) 70,922 11,986 ■ Sumitomo Metal Mining Management ■ Stone Boy Inc. (U.S.) 864.1 (Shanghai) Co., Ltd. (China) 847.9 830.5 Smelting & Refining ■ Sumitomo Metal Mining Canada Ltd. 808.5 Southeast Asia ● ■ 800 Acids Co., Ltd. Coral Bay Nickel Corporation (Philippines) (Canada) (9.3%) ● ● 725.8 MS Zinc Co., Ltd. Nickel Asia Corporation (Philippines) ■ SMM Resources Ltd. (Canada) ■ ■ 77,489 Shisaka Smelting Co., Ltd. Taganito HPAL Nickel Corporation ■ Sumac Mines Ltd. (Canada) ■ Sumiko Logistics Co., Ltd. (Philippines) 600 ■ Taihei Metal Industry Co., Ltd. ■ Sumitomo Metal Mining Philippine Holdings Total ■ Hyuga Smelting Co., Ltd. Corporation (Philippines) 830,546 ● Mitsui Sumitomo Metal Mining Brass ● P.T. Vale Indonesia Tbk (Indonesia) 400 & Copper Co., Ltd. Other Regions East Asia (20.7%) Materials 171,692 Japan ■ Dongguan Sumiko Electronic Paste Co., Materials Mineral Resources (60.0%) ● SH Copper Products, Co. Ltd. Ltd. (China) ● Compañia Contractual Minera Candelaria 200 498,457 ■ SH Precision Co., Ltd. ■ Shanghai Sumiko Electronic Paste Co., Ltd. (Chile) ■ SH Materials Co., Ltd. (China) ● Compañia Contractual Minera Ojos del ■ SMM Precision Co., Ltd. ■ SH Electronics Suzhou Co., Ltd. (China) Salado (Chile) ● ■ 0 N.E. Chemcat Corporation Suzhou SH Precision Co., Ltd. (China) ■ Sumitomo Metal Mining Chile Ltda. (Chile) ■ ■ 2009 2010 2011 2012 2013 (FY) Ohkuchi Electronics Co., Ltd. Sumiko Advanced Materials (Suzhou) Co., ■ SMM Sierra Gorda Inversiones Ltda. (Chile) ■ Ohkuchi Materials Co., Ltd. Ltd. (China) ● Sierra Gorda S.C.M. (Chile) ● ■ Granopt Co., Ltd. SH Electronics Chengdu Co., Ltd. (China) ■ SMM-SG Holdings Inversiones Ltda. (Chile) ■ ■ ■ Consolidated Recurring Profit/Consolidated Net Income (Billion yen) ■ Number of Officers/Employees by Region Shinko Co., Ltd. SH Precision Chengdu Co., Ltd. (China) ■ Sumitomo Metal Mining Peru S.A. (Peru) ■ ■ Sumiko Kunitomi Denshi Co., Ltd. Sumico Lubricant Trading (Shanghai) Co., ● Sociedad Minera Cerro Verde S.A.A. (Peru) ■ Other (1.4%) Sumiko Lubricant Co., Ltd. Ltd. (China) ■ Sumitomo Metal Mining do Brasil Ltda. ■ SumikoTec Co., Ltd. ■ Consolidated net income 137 Taiwan Sumiko Materials Co., Ltd. (Taiwan) (Brazil) 150 North America (3.6%) ■ ■ Sumitomo Metal Mining Siporex Co., SH Electronics Taiwan Co., Ltd. (Taiwan) ■ Consolidated recurring profit 335 Sumitomo Metal Mining Oceania Pty. Ltd. Ltd. ■ SMM KOREA Co., Ltd. (South Korea) (Australia) ■ Niihama Electronics Co., Ltd. ■ Malaysian Electronics Materials Sdn. Bhd. 123.7 East Asia (13.8%) ■ SMM Cerro Verde Netherlands B.V. ■ Niihama Materials Co., Ltd. (Malaysia) 115.0 114.4 (Netherlands) 1,295 ■ ■ 108.8 Nittosha Co., Ltd. Malaysian SH Electronics Sdn. Bhd. ■ SMM Solomon Ltd. (Solomon Islands) ● Nippon Ketjen Co., Ltd. 100 (Malaysia) ■ Malaysian SH Precision Sdn. Bhd. 87.8 Total Smelting & Refining 84.0 86.6 Other (Malaysia) ● Figesbal S.A. (New Caledonia) 80.3 9,412 ■ Igeta Heim Co., Ltd. ■ SH Asia Pacific Pte. Ltd. (Singapore) ■ Sumic Nickel Netherlands B.V. (Netherlands) ■ Southeast Asia JCO Co., Ltd. ■ Sumiko Tape Materials Singapore Pte. Ltd. 65.3 Japan ■ 54.0 (17.5%) Sumiko Technical Service Co., Ltd. (Singapore) Other Businesses (63.7%) ■ ■ 50 1,650 Sumiko Techno-Research Co., Ltd. ■ Sumiko Leadframe (Thailand) Co., Ltd. SMM Holland B.V. (Netherlands) 5,995 ■ Sumiko Plantech Co., Ltd. (Thailand) ■ Sumitomo Metal Mining Engineering Co., Ltd. SMM ■ Japan Irradiation Service Co., Ltd. ■ Consolidated subsidiaries ● Equity-method affiliates

0 * As of March 31, 2014. “Number of officers/employees by region” does not 2009 2010 2011 2012 2013 (FY) match “No. of employees (consolidated)” as it includes full-time officers, non-regular and limited-term employees. 05 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 06 SMM Group CSR

Corporate Philosophy for a Sustainable Society Six Key CSR Areas and Vision for 2020 The Sumitomo Group has been developing its business for more than 400 years through continuous adherence to the Sumitomo In 2008, SMM determined key areas of CSR activity for the Group and a Vision for 2020 based on the impact of those areas on the Business Spirit. Acknowledging the importance of the values and ethics our forerunners built into the Sumitomo Business Spirit, Group and the extent of related social needs. We will actively pursue initiatives in those areas in line with the CSR Policy, toward we will make every effort to strengthen SMM Group business and consolidate society’s trust in us. our goal of “sustainable co-existence with society and the global environment.” The SMM Group upholds the Sumitomo Business Spirit in its Corporate Philosophy and Management Vision. The very activities we pursue to substantiate the visions expressed in those lines constitute SMM’s CSR activity and their implementation will take us closer toward our goal of “sustainable co-existence with society and the global environment.”

Effective Use of Resources Environmental A company that generates Preservation resources using innovative Stakeholder Reduced CO2 emissions e Sumitomo Business Spirit technology (energy savings) and communication Business development through conservation of biodiversity technologies to process Article 1 low-grade/hard-to-process ores and A company that meets A company that is open to recycle materials from urban sources Sumitomo shall achieve strength and prosperity by placing communication with international anti-global warming stakeholder groups worldwide standards by using advanced prime importance on integrity and sound management in technologies the conduct of its business. • Zero industrial waste emissions • An expansion of material business concerning products with low environmental impact (creating, Six Key CSR Areas storing, and saving of energy) Article 2 and Vision for 2020 Sumitomo shall manage its activities with foresight and exibility Occupational in order to cope eectively with the changing times. Under no Health and Safety Respect for People circumstances, however, shall it pursue easy gains or act imprudently. A company that accords safety Contribution to Society the highest priority and provides and Human Rights and Local Communities “Business Principles” forming the “Rules Governing the House of Sumitomo,” formulated in 1928 comfortable working • A company that respects human rights environments and diversity of employees, develops A company in which • No occupational accidents throughout the employees with high awareness of employees are proud to work SMM Group (including business partners) human rights, and gives equal along with the company on • Zero incidence of occupational disease opportunities depending on social contribution activities • Detailed information on the Sumitomo Business Spirit can be viewed on pp. 11-12. Create workplaces where protective motivations to work and abilities of rooted in the area equipment (earplugs/masks) is employees unnecessary • A company that respects human rights • SMM Group Corporate Philosophy SMM Group Management Vision A vibrant company whose workforce is of people who are affected by physically and mentally healthy business activities of the SMM Group Sumitomo Metal Mining Co., Ltd. (SMM), in accordance with the By developing and employing innovative technology, we shall • A company that does not get involved Sumitomo Business Spirit, shall, through the performance of ful ll our social responsibilities as a manufacturing enterprise. in complicity with an entity that sound corporate activities and the promotion of sustainable Based on the principles of compliance, environmental protection causes violations of human rights at co-existence with the global environment, seek to make positive and operational safety, the Sumitomo Metal Mining Group shall contributions to society and to ful ll its responsibilities to its pursue maximum corporate value through the provision, via its areas with undeveloped social stakeholders, in order to win ever greater trust. global network, of high-quality materials such as non-ferrous infrastructure and at troubled areas SMM shall, based on respect for all individuals and recognizing metals and electronics and advanced materials. each person’s dignity and value, seek to be a forward-minded and vibrant company. CSR Policy SMM Group CSR Objectives

1. SMM shall work to combat global warming by promoting recycling and eective resource utilization while also targeting technological innovation and continuous improvements in energy eciency. Sustainable Co-existence with 2. SMM shall promote sustainable co-existence with society by respecting the needs of local communities in which we operate around the world. Society and the Global Environment 3. To continue sound business activities, SMM shall respect human rights and shall try to be a company in which diverse human resources take active parts. 4. According safety the highest priority, SMM shall provide safe, comfortable working environments and seek to eliminate occupational accidents. 5. SMM shall strengthen communications with all stakeholders to build healthy, trust-based relationships.

07 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 08 SMM Group CSR

Corporate Philosophy for a Sustainable Society Six Key CSR Areas and Vision for 2020 The Sumitomo Group has been developing its business for more than 400 years through continuous adherence to the Sumitomo In 2008, SMM determined key areas of CSR activity for the Group and a Vision for 2020 based on the impact of those areas on the Business Spirit. Acknowledging the importance of the values and ethics our forerunners built into the Sumitomo Business Spirit, Group and the extent of related social needs. We will actively pursue initiatives in those areas in line with the CSR Policy, toward we will make every effort to strengthen SMM Group business and consolidate society’s trust in us. our goal of “sustainable co-existence with society and the global environment.” The SMM Group upholds the Sumitomo Business Spirit in its Corporate Philosophy and Management Vision. The very activities we pursue to substantiate the visions expressed in those lines constitute SMM’s CSR activity and their implementation will take us closer toward our goal of “sustainable co-existence with society and the global environment.”

Effective Use of Resources Environmental A company that generates Preservation resources using innovative Stakeholder Reduced CO2 emissions e Sumitomo Business Spirit technology (energy savings) and communication Business development through conservation of biodiversity technologies to process Article 1 low-grade/hard-to-process ores and A company that meets A company that is open to recycle materials from urban sources Sumitomo shall achieve strength and prosperity by placing communication with international anti-global warming stakeholder groups worldwide standards by using advanced prime importance on integrity and sound management in technologies the conduct of its business. • Zero industrial waste emissions • An expansion of material business concerning products with low environmental impact (creating, Six Key CSR Areas storing, and saving of energy) Article 2 and Vision for 2020 Sumitomo shall manage its activities with foresight and exibility Occupational in order to cope eectively with the changing times. Under no Health and Safety Respect for People circumstances, however, shall it pursue easy gains or act imprudently. A company that accords safety Contribution to Society the highest priority and provides and Human Rights and Local Communities “Business Principles” forming the “Rules Governing the House of Sumitomo,” formulated in 1928 comfortable working • A company that respects human rights environments and diversity of employees, develops A company in which • No occupational accidents throughout the employees with high awareness of employees are proud to work SMM Group (including business partners) human rights, and gives equal along with the company on • Zero incidence of occupational disease opportunities depending on social contribution activities • Detailed information on the Sumitomo Business Spirit can be viewed on pp. 11-12. Create workplaces where protective motivations to work and abilities of rooted in the area equipment (earplugs/masks) is employees unnecessary • A company that respects human rights • SMM Group Corporate Philosophy SMM Group Management Vision A vibrant company whose workforce is of people who are affected by physically and mentally healthy business activities of the SMM Group Sumitomo Metal Mining Co., Ltd. (SMM), in accordance with the By developing and employing innovative technology, we shall • A company that does not get involved Sumitomo Business Spirit, shall, through the performance of ful ll our social responsibilities as a manufacturing enterprise. in complicity with an entity that sound corporate activities and the promotion of sustainable Based on the principles of compliance, environmental protection causes violations of human rights at co-existence with the global environment, seek to make positive and operational safety, the Sumitomo Metal Mining Group shall contributions to society and to ful ll its responsibilities to its pursue maximum corporate value through the provision, via its areas with undeveloped social stakeholders, in order to win ever greater trust. global network, of high-quality materials such as non-ferrous infrastructure and at troubled areas SMM shall, based on respect for all individuals and recognizing metals and electronics and advanced materials. each person’s dignity and value, seek to be a forward-minded and vibrant company. CSR Policy SMM Group CSR Objectives

1. SMM shall work to combat global warming by promoting recycling and eective resource utilization while also targeting technological innovation and continuous improvements in energy eciency. Sustainable Co-existence with 2. SMM shall promote sustainable co-existence with society by respecting the needs of local communities in which we operate around the world. Society and the Global Environment 3. To continue sound business activities, SMM shall respect human rights and shall try to be a company in which diverse human resources take active parts. 4. According safety the highest priority, SMM shall provide safe, comfortable working environments and seek to eliminate occupational accidents. 5. SMM shall strengthen communications with all stakeholders to build healthy, trust-based relationships.

07 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 08 SMM Group CSR

CSR Promotion Framework Our Stakeholders SMM’s CSR activities are promoted by the CSR Committee, toward annual targets in the quest to realize the “Vision for Prior to the launch of CSR activities at SMM in 2008, deliberations were held relating to the SMM Group Corporate Philosophy, which convenes at least once a year and comprises the 2020.” Management Vision, CSR Policy and Vision for 2020, and the following entities with an interest in SMM’s activities were identified as President, as chairman, and the heads of the business and CSR activities consistent with these annual targets are stakeholders: customers, shareholders, employees, local communities, creditors, business partners, citizen groups, and the government. Head Office divisions. advanced principally through initiatives at business sites SMM aims to maximize its corporate value and has established targets that specify the “ideal company” for each stakeholder category. Attached to the CSR Committee are two working groups— and group companies. Actual implementation is carried out the Compliance and Risk Management Working Groups— by all officers and employees according to their individual and six subcommittees overseeing the following areas: roles. efficient resource utilization, environmental preservation, The CSR Committee operates a PDCA (Plan-Do-Check-Act) Communication with Stakeholders corporate citizenship, human rights and human resources cycle, reviewing activities each year and evaluating the development, occupational health and safety, and company’s performance in social, environmental and opportunities for employees to offer feedback and requests communication. Each of these six subcommittees, which financial terms. Customers are arranged. Talks between individual employees and their correspond to the SMM Group’s “Six Key CSR Areas,” works Communication with customers occurs mainly via sales supervisors are also held to ascertain the progress being personnel. Responses are made to opinions received made to meet job targets set for the fiscal year. Many through action at the management level for each business  comments and questions are fielded through these talks. CSR Promotion Framework using the frameworks in place.

Local Communities Shareholders and Investors The SMM Group seeks to communicate sufficiently with people CSR Committee Compliance Working Group Chair: President Institutional investors and analysts are kept informed about in the community when making inroads into a new region. the progress of the business strategies under SMM’s Opportunities for communication are regularly arranged even (Reports to: Legal & General Deputy Chair: Affairs Dept.) 3-Year Business Plan through business strategy progress after operations commence and an effort is made to offer CSR Executive Officer, briefings held twice a year. They are also updated on adequate explanations to members of the community when SMM Risk Management SMM’s financial results through conference calls at the time problems occur. We also carry out various activities to Working Group of the quarterly earnings announcements. Meetings are strengthen ties with the community, such as providing support Members: (Heads of …) also held on an individual basis to facilitate understanding for and participating in events. Mineral Resources Div. (Reports to: Safety & Environment Control Dept.) of SMM’s management. Non-ferrous Metals Div. Individual investors are briefed on business conditions Business Partners Materials Div. Efficient Resource via such means as the company website and the Report Technology Div. Utilization Subcommittee for Shareholders, which is published twice a year. This is based on friendly relationships built up over the All feedback from investors is regularly reported to the years. Individual divisions within the SMM Group stay in Engineering Div. (Reports to: Technology Div.) management and applied to the administration of the touch with business partners on a daily basis to hold Board of Sierra Gorda Project Div. company. dialogue on business operations and products and to President Directors Head Office divisions Environmental Preservation exchange technological information. Secretary: General Manager, Safety & Subcommittee Environment Control Dept. Employees (Reports to: Safety & Environment Other Members of the Secretariat: Control Dept.) In Japan, workers’ unions formed at branch offices and Appointed by the CSR SMM Group companies fall under the umbrella of the SMM also engages in regular information exchange and Corporate Citizenship Executive Officer Federation of Sumitomo Metal Mining Workers’ Union. SMM round-table discussions with local government and industry Subcommittee routinely holds briefings or discussions with each union. groups in communities where our facilities and group (Reports to: Legal & General Overseas, organizations representing employees are companies are located, as well as with citizen groups related Affairs Dept.) regularly briefed on the business situation and to our business.

Human Rights & Human Resources Internal Controls Committee Secretariat Development Subcommittee Chair: President  Each SMM Stakeholder Category’s “Ideal Company” (Reports to: Internal Audit Dept.) (Safety & (Reports to: Personnel Dept.) A company with all-round competitiveness, An attractive investment as a company aiming to Environment boasting advantage over competitors in terms raise corporate value through efficient business Branch Control Dept.) Occupational Health & of technology, quality, delivery and price management and sound governance while offices Customers Shareholders delivering a dividend commensurate with Safety Subcommittee performance and disclosing information as appropriate Business (Reports to: Safety & Environment A company that provides a healthy work environment where individual divisions Control Dept.) Local A company seeking to co-exist roles within the organization are Employees Communities clearly defined and employees take with the local community and contribute to regional growth Head Office Communication Subcommittee pride in their work divisions SMM A company demonstrating considerable technological (Reports to: Public Relations A trustworthy company with strong Creditors Business capability and integrity while placing & Investor Relations Dept.) earning power and sound finances Partners value on trust and with which mutual prosperity can be assured

A company that engages in an appropriate Citizen Government A company that maintains total legal level of communication, maintaining an Groups compliance and contributes to the growth acute awareness of its corporate of the countries and communities in which responsibilities it operates

09 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 10 SMM Group CSR

CSR Promotion Framework Our Stakeholders SMM’s CSR activities are promoted by the CSR Committee, toward annual targets in the quest to realize the “Vision for Prior to the launch of CSR activities at SMM in 2008, deliberations were held relating to the SMM Group Corporate Philosophy, which convenes at least once a year and comprises the 2020.” Management Vision, CSR Policy and Vision for 2020, and the following entities with an interest in SMM’s activities were identified as President, as chairman, and the heads of the business and CSR activities consistent with these annual targets are stakeholders: customers, shareholders, employees, local communities, creditors, business partners, citizen groups, and the government. Head Office divisions. advanced principally through initiatives at business sites SMM aims to maximize its corporate value and has established targets that specify the “ideal company” for each stakeholder category. Attached to the CSR Committee are two working groups— and group companies. Actual implementation is carried out the Compliance and Risk Management Working Groups— by all officers and employees according to their individual and six subcommittees overseeing the following areas: roles. efficient resource utilization, environmental preservation, The CSR Committee operates a PDCA (Plan-Do-Check-Act) Communication with Stakeholders corporate citizenship, human rights and human resources cycle, reviewing activities each year and evaluating the development, occupational health and safety, and company’s performance in social, environmental and opportunities for employees to offer feedback and requests communication. Each of these six subcommittees, which financial terms. Customers are arranged. Talks between individual employees and their correspond to the SMM Group’s “Six Key CSR Areas,” works Communication with customers occurs mainly via sales supervisors are also held to ascertain the progress being personnel. Responses are made to opinions received made to meet job targets set for the fiscal year. Many through action at the management level for each business  comments and questions are fielded through these talks. CSR Promotion Framework using the frameworks in place.

Local Communities Shareholders and Investors The SMM Group seeks to communicate sufficiently with people CSR Committee Compliance Working Group Chair: President Institutional investors and analysts are kept informed about in the community when making inroads into a new region. the progress of the business strategies under SMM’s Opportunities for communication are regularly arranged even (Reports to: Legal & General Deputy Chair: Affairs Dept.) 3-Year Business Plan through business strategy progress after operations commence and an effort is made to offer CSR Executive Officer, briefings held twice a year. They are also updated on adequate explanations to members of the community when SMM Risk Management SMM’s financial results through conference calls at the time problems occur. We also carry out various activities to Working Group of the quarterly earnings announcements. Meetings are strengthen ties with the community, such as providing support Members: (Heads of …) also held on an individual basis to facilitate understanding for and participating in events. Mineral Resources Div. (Reports to: Safety & Environment Control Dept.) of SMM’s management. Non-ferrous Metals Div. Individual investors are briefed on business conditions Business Partners Materials Div. Efficient Resource via such means as the company website and the Report Technology Div. Utilization Subcommittee for Shareholders, which is published twice a year. This is based on friendly relationships built up over the All feedback from investors is regularly reported to the years. Individual divisions within the SMM Group stay in Engineering Div. (Reports to: Technology Div.) management and applied to the administration of the touch with business partners on a daily basis to hold Board of Sierra Gorda Project Div. company. dialogue on business operations and products and to President Directors Head Office divisions Environmental Preservation exchange technological information. Secretary: General Manager, Safety & Subcommittee Environment Control Dept. Employees (Reports to: Safety & Environment Other Members of the Secretariat: Control Dept.) In Japan, workers’ unions formed at branch offices and Appointed by the CSR SMM Group companies fall under the umbrella of the SMM also engages in regular information exchange and Corporate Citizenship Executive Officer Federation of Sumitomo Metal Mining Workers’ Union. SMM round-table discussions with local government and industry Subcommittee routinely holds briefings or discussions with each union. groups in communities where our facilities and group (Reports to: Legal & General Overseas, organizations representing employees are companies are located, as well as with citizen groups related Affairs Dept.) regularly briefed on the business situation and to our business.

Human Rights & Human Resources Internal Controls Committee Secretariat Development Subcommittee Chair: President  Each SMM Stakeholder Category’s “Ideal Company” (Reports to: Internal Audit Dept.) (Safety & (Reports to: Personnel Dept.) A company with all-round competitiveness, An attractive investment as a company aiming to Environment boasting advantage over competitors in terms raise corporate value through efficient business Branch Control Dept.) Occupational Health & of technology, quality, delivery and price management and sound governance while offices Customers Shareholders delivering a dividend commensurate with Safety Subcommittee performance and disclosing information as appropriate Business (Reports to: Safety & Environment A company that provides a healthy work environment where individual divisions Control Dept.) Local A company seeking to co-exist roles within the organization are Employees Communities clearly defined and employees take with the local community and contribute to regional growth Head Office Communication Subcommittee pride in their work divisions SMM A company demonstrating considerable technological (Reports to: Public Relations A trustworthy company with strong Creditors Business capability and integrity while placing & Investor Relations Dept.) earning power and sound finances Partners value on trust and with which mutual prosperity can be assured

A company that engages in an appropriate Citizen Government A company that maintains total legal level of communication, maintaining an Groups compliance and contributes to the growth acute awareness of its corporate of the countries and communities in which responsibilities it operates

09 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 10 is the responsibility to the Sumitomo brand. company and their contribution to the world. My guess is that Special Feature 1 Management and older employees conduct themselves in the many employees can relate to the Sumitomo Business Spirit for Learning about the Sumitomo knowledge that they are looked to as an example. Younger the very reason that it contains universal teachings, and that is The History of employees observe their older colleagues and supervisors to why they are also interested in how Sumitomo has developed the SMM Group get a feel for the particular style and culture of the organization, over the years in line with that Business Spirit from History which they proceed to acquire naturally. I called the Sumitomo philosophy. Business Spirit DNA because it is acquired in this manner and is Sumitomo’s first director general, Integrity. Sound management. No pursuing easy gains. The Sumitomo Business Spirit sets out a common philosophy for not something that can be taught. Saihei Hirose, lived by the words, the entire Sumitomo Group. Assistant curator of the Sumitomo Historical Archives, Teruaki Sueoka, explains in simple “Disobeying orders if they are not in terms how individual employees can apply the philosophy in their daily jobs once they properly understand it. the master’s interests—that is loyalty.” What he is saying is that An Enterprising Spirit Allowing someone truly committed to the The Sumitomo Business Spirit Continuation of Core Business nation or the company would argue against orders from a superior if Saihei Hirose (Photo: Sumitomo While Adapting to the Changing Times Historical Archive) Summary of Business Operations they were unethical or conflicted The statement in the Sumitomo Business Spirit on not pursuing with the interests of the nation or the company. As all Sumitomo Sumitomo shall achieve strength and prosperity by placing prime importance on integrity and sound “easy gains,” is apparently used as a guideline, along with the Group employees know, Hirose, as general manager of the Article 1 management in the conduct of its business. part about “placing prime importance on integrity and sound Besshi mine during the turbulent years of the Meiji Restoration, management,” by many employees in their day-to-day work. But opposed the sale of the Besshi Copper Mine ordered by senior Sumitomo shall manage its activities with foresight and exibility in order to cope eectively with the they must be careful not to focus excessively on the expression. management at the head office in Osaka and thereby Article 2 changing times. Under no circumstances, however, shall it pursue easy gains or act imprudently. The Business Principles were penned after the Meiji Restoration contributed to the development of during the Meiji “bubble,” a period of economic prosperity both Japan and Sumitomo. marked by the sudden emergence of corporations when Teigo Iba, the second director investment in shares and land was extremely popular. “Easy general, lived by the motto, “The Obvious, Universal Principles Many people would think consider the importance of integrity gains” refers to short-term profits and the term is included here noble cherish wealth and take the We Must Not Take for Granted and sound management obvious, and so many companies to teach the importance of focusing on core business—that noble way to acquire it.” In other would not see any need to draw attention to them. But all of profit has to be earned through hard work. That is exactly why it words, people of fine character, The Sumitomo Business Spirit is DNA shared by all Sumitomo Sumitomo’s successive director generals believed that it was is important, as stated in the section before the part about easy while they may cherish wealth, do Group companies. Looking at how and when it was exactly because these principles were so obvious that people gains, that activities have to be managed “with foresight and not deviate from human morals in established, we can trace its origins to a letter, known as the forgot about them, and made a point of reiterating them in New flexibility in order to cope effectively with the changing times.” obtaining that wealth. Corporations , written by the founder of the House of Year instructions. They kept repeating them because they were Teigo Iba (Photo: Sumitomo Monjuin Shiigaki In the early years of the Meiji era, the Besshi Copper Mine was Historical Archive) are established to generate a profit, Sumitomo, Sumitomo Masatomo (1585 –1652). In the early Edo important. a step ahead of the Japanese government when it hired so there is no need to be ashamed period letter, Masatomo (or Monjuin), who was a man of religion The Sumitomo Business Spirit is neither a secret to making talented French engineer Bruno Louis Larroque to revolutionize about making money. However, profit should be made through and a philosopher as well as a merchant, explains to Kanjuro, a money, nor a call for generation of benefit only for one’s own technology at the mine so that it could rival Western powers. open and fair means, with part of it channeled back to society. young employee, his rules for doing business. The content can company. It exists on a much higher level as a universal Companies of the Sumitomo Group also took the lead in This is relevant to corporate social responsibility (CSR), too. Iba be largely divided into three parts. The first part says to carry philosophy. Over a long period of time, some 300 years, introducing new technologies through joint ventures with practiced this policy in addressing smoke pollution at the Besshi out business with the utmost sincerity, and to improve yourself Sumitomo has had to deal with natural disasters and labor overseas corporations on the basis that borders were Copper Mine by relocating the smelter to Shisaka Island and and become a fine person. The second part expounds the issues in its management of the Besshi Copper Mine, and has non-existent when it came to technology, which had to be planting forests in the Besshi hills. importance of compliance and refers to the laws of the constantly thought hard about what is important to the nation judged on how good it was. In other words, it was important to In my opinion, the important question is whether or not the government (shogunate) of the day. The third part says to and to local communities. The Sumitomo Business Spirit is the accommodate society’s needs and the trends of the day by company and individual employees make the effort to search for explain to customers in a kind and courteous manner until they essence, an upshot of those events and efforts, and even as doing whatever had to be done and cease doing whatever had insight. I believe Sumitomo Group employees are very lucky, understand, pointing out that business comes with Sumitomo Group companies globalize, having originally to be stopped, and also to take the initiative by being quick to because there are 400 years of historical insight right there if accountability. branched out from the Besshi Copper Mine operation, I believe embrace new ideas. Sumitomo refers to this as an “enterprising they look for it. And it is a history they can be proud of. More than a century later, in 1740, the same passages the philosophy, as long as it is shared, will hold true all over the spirit.” appear in the Nagasaki-ten Okitegaki (family code of conduct world. for the Nagasaki branch). It is likely that Kanjuro’s descendants Enhancing the Sumitomo Brand had passed Masatomo’s letter to the Sumitomo family, who in Learning and Gaining Insight turn incorporated it into the family code. When the House of as the Fountainhead of the Group Sumitomo and the business it owned were split into separate from the 400-Year History in the Style of the Besshi Copper Mine entities in the Meiji era (1868 – 1912), the Sumitomo family behind the Sumitomo Business Spirit code was split into the kaken, or family charter, to be observed SMM continues to refine the mining technology developed over by the House of Sumitomo, including the head of the family; While the Business Principles could be said to be, as it were, 300 years at the Besshi Copper Mine at the Hishikari Mine and and the kaho, or family code, which business operators and the essence of Sumitomo business, binding oneself to their has introduced it to development of the Pogo Gold Mine. By employees had to observe. The first and second articles of the every word would be akin to dogmatism (inflexible mentality or persisting with its core mining business, SMM is indeed a latter (the family code) exist today as the “Business Principles,” stance involving stubborn adherence to a particular set of fountainhead, so to speak, for the Sumitomo Group. In fact, the which make up the Sumitomo Business Spirit. principles with no regard for circumstance or realities). Business Principles had a third article: The Sumitomo Business Spirit must not, however, be directly Philosophy is not about following a course of action because a “As the source of wealth for all generations of the Sumitomo Sumitomo Masatomo, founder of Monjuin Shiigaki associated with the Monjuin Shiigaki letter. The Japanese terms the House of Sumitomo (Photo: certain teaching exists, and it is impossible to fully understand family, the ebb and flow of fortunes of the mining business in the for integrity, sound management and easy gains used in the Sumitomo Historical Archive) philosophy just by reading its text. Besshi hills of Iyo Province (now Ehime Prefecture) affects the Business Principles are all contemporary terms coined during Everyone, at some time, finds himself, or herself, unable to fortunes of the House of Sumitomo. The business shall therefore or after the Meiji era. The Monjuin Shiigaki revealed the DNA to Be Acquired as Appropriate decide what to do. At those times, employees might want to refer to past achievements and aim to generate future profits to essence of business as the founder of the House of Sumitomo look back over the company’s history, using the Sumitomo bring about even greater prosperity.” intended to explicate it and our Meiji era forerunners drew from According to the Role and Responsibility Business Spirit as a starting point, and see how their This article, outlining the business philosophy of focusing on that a set of universal teachings. The younger the age group, the lower the rate of penetration of forerunners thought and acted, and the outcomes they created. core business, was omitted in 1927 after the Besshi Copper the Sumitomo Business Spirit. But this is only to be expected. They could gain insight by learning in this way about the Mine was removed from direct administration of the Sumitomo People’s roles change with the positions they hold, and with conduct of forerunners behind the Sumitomo Business Spirit. family and the Sumitomo Group branched into manufacturing their age. Those in their 20s mainly undertake tasks within their Other Sumitomo Group companies are also globalizing, and finance. But I believe this third article stressing the own workplaces and often seek instructions from their meaning there are increasing opportunities for employees importance of focusing on core business as a fountainhead for supervisors. Situations where they make their own decisions are around the world to hear about the Sumitomo Business Spirit. the Sumitomo Group is especially relevant to SMM. limited. Managers, on the other hand, have more to do with Employees of the Sumitomo Group overseas, with varying I truly hope to see SMM help to enhance the Sumitomo brand people outside the workplace and have greater responsibilities. cultures and values, sometimes come forward saying they want by leading the way for the rest of the group, as you would Teruaki Sueoka to learn about Sumitomo history. They say they want to know expect of such a fountainhead. Assistant Curator, Sumitomo Historical Archives One such responsibility is their responsibility to the company. Special Adviser, Niihama City Hirose Memorial Museum Another, as in the case of Sumitomo Metal Mining (SMM), about the managers and engineers who have worked for their

11 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 12 is the responsibility to the Sumitomo brand. company and their contribution to the world. My guess is that Special Feature 1 Management and older employees conduct themselves in the many employees can relate to the Sumitomo Business Spirit for Learning about the Sumitomo knowledge that they are looked to as an example. Younger the very reason that it contains universal teachings, and that is The History of employees observe their older colleagues and supervisors to why they are also interested in how Sumitomo has developed the SMM Group get a feel for the particular style and culture of the organization, over the years in line with that Business Spirit from History which they proceed to acquire naturally. I called the Sumitomo philosophy. Business Spirit DNA because it is acquired in this manner and is Sumitomo’s first director general, Integrity. Sound management. No pursuing easy gains. The Sumitomo Business Spirit sets out a common philosophy for not something that can be taught. Saihei Hirose, lived by the words, the entire Sumitomo Group. Assistant curator of the Sumitomo Historical Archives, Teruaki Sueoka, explains in simple “Disobeying orders if they are not in terms how individual employees can apply the philosophy in their daily jobs once they properly understand it. the master’s interests—that is loyalty.” What he is saying is that An Enterprising Spirit Allowing someone truly committed to the The Sumitomo Business Spirit Continuation of Core Business nation or the company would argue against orders from a superior if Saihei Hirose (Photo: Sumitomo While Adapting to the Changing Times Historical Archive) Summary of Business Operations they were unethical or conflicted The statement in the Sumitomo Business Spirit on not pursuing with the interests of the nation or the company. As all Sumitomo Sumitomo shall achieve strength and prosperity by placing prime importance on integrity and sound “easy gains,” is apparently used as a guideline, along with the Group employees know, Hirose, as general manager of the Article 1 management in the conduct of its business. part about “placing prime importance on integrity and sound Besshi mine during the turbulent years of the Meiji Restoration, management,” by many employees in their day-to-day work. But opposed the sale of the Besshi Copper Mine ordered by senior Sumitomo shall manage its activities with foresight and exibility in order to cope eectively with the they must be careful not to focus excessively on the expression. management at the head office in Osaka and thereby Article 2 changing times. Under no circumstances, however, shall it pursue easy gains or act imprudently. The Business Principles were penned after the Meiji Restoration contributed to the development of during the Meiji “bubble,” a period of economic prosperity both Japan and Sumitomo. marked by the sudden emergence of corporations when Teigo Iba, the second director investment in shares and land was extremely popular. “Easy general, lived by the motto, “The Obvious, Universal Principles Many people would think consider the importance of integrity gains” refers to short-term profits and the term is included here noble cherish wealth and take the We Must Not Take for Granted and sound management obvious, and so many companies to teach the importance of focusing on core business—that noble way to acquire it.” In other would not see any need to draw attention to them. But all of profit has to be earned through hard work. That is exactly why it words, people of fine character, The Sumitomo Business Spirit is DNA shared by all Sumitomo Sumitomo’s successive director generals believed that it was is important, as stated in the section before the part about easy while they may cherish wealth, do Group companies. Looking at how and when it was exactly because these principles were so obvious that people gains, that activities have to be managed “with foresight and not deviate from human morals in established, we can trace its origins to a letter, known as the forgot about them, and made a point of reiterating them in New flexibility in order to cope effectively with the changing times.” obtaining that wealth. Corporations , written by the founder of the House of Year instructions. They kept repeating them because they were Teigo Iba (Photo: Sumitomo Monjuin Shiigaki In the early years of the Meiji era, the Besshi Copper Mine was Historical Archive) are established to generate a profit, Sumitomo, Sumitomo Masatomo (1585 –1652). In the early Edo important. a step ahead of the Japanese government when it hired so there is no need to be ashamed period letter, Masatomo (or Monjuin), who was a man of religion The Sumitomo Business Spirit is neither a secret to making talented French engineer Bruno Louis Larroque to revolutionize about making money. However, profit should be made through and a philosopher as well as a merchant, explains to Kanjuro, a money, nor a call for generation of benefit only for one’s own technology at the mine so that it could rival Western powers. open and fair means, with part of it channeled back to society. young employee, his rules for doing business. The content can company. It exists on a much higher level as a universal Companies of the Sumitomo Group also took the lead in This is relevant to corporate social responsibility (CSR), too. Iba be largely divided into three parts. The first part says to carry philosophy. Over a long period of time, some 300 years, introducing new technologies through joint ventures with practiced this policy in addressing smoke pollution at the Besshi out business with the utmost sincerity, and to improve yourself Sumitomo has had to deal with natural disasters and labor overseas corporations on the basis that borders were Copper Mine by relocating the smelter to Shisaka Island and and become a fine person. The second part expounds the issues in its management of the Besshi Copper Mine, and has non-existent when it came to technology, which had to be planting forests in the Besshi hills. importance of compliance and refers to the laws of the constantly thought hard about what is important to the nation judged on how good it was. In other words, it was important to In my opinion, the important question is whether or not the government (shogunate) of the day. The third part says to and to local communities. The Sumitomo Business Spirit is the accommodate society’s needs and the trends of the day by company and individual employees make the effort to search for explain to customers in a kind and courteous manner until they essence, an upshot of those events and efforts, and even as doing whatever had to be done and cease doing whatever had insight. I believe Sumitomo Group employees are very lucky, understand, pointing out that business comes with Sumitomo Group companies globalize, having originally to be stopped, and also to take the initiative by being quick to because there are 400 years of historical insight right there if accountability. branched out from the Besshi Copper Mine operation, I believe embrace new ideas. Sumitomo refers to this as an “enterprising they look for it. And it is a history they can be proud of. More than a century later, in 1740, the same passages the philosophy, as long as it is shared, will hold true all over the spirit.” appear in the Nagasaki-ten Okitegaki (family code of conduct world. for the Nagasaki branch). It is likely that Kanjuro’s descendants Enhancing the Sumitomo Brand had passed Masatomo’s letter to the Sumitomo family, who in Learning and Gaining Insight turn incorporated it into the family code. When the House of as the Fountainhead of the Group Sumitomo and the business it owned were split into separate from the 400-Year History in the Style of the Besshi Copper Mine entities in the Meiji era (1868 – 1912), the Sumitomo family behind the Sumitomo Business Spirit code was split into the kaken, or family charter, to be observed SMM continues to refine the mining technology developed over by the House of Sumitomo, including the head of the family; While the Business Principles could be said to be, as it were, 300 years at the Besshi Copper Mine at the Hishikari Mine and and the kaho, or family code, which business operators and the essence of Sumitomo business, binding oneself to their has introduced it to development of the Pogo Gold Mine. By employees had to observe. The first and second articles of the every word would be akin to dogmatism (inflexible mentality or persisting with its core mining business, SMM is indeed a latter (the family code) exist today as the “Business Principles,” stance involving stubborn adherence to a particular set of fountainhead, so to speak, for the Sumitomo Group. In fact, the which make up the Sumitomo Business Spirit. principles with no regard for circumstance or realities). Business Principles had a third article: The Sumitomo Business Spirit must not, however, be directly Philosophy is not about following a course of action because a “As the source of wealth for all generations of the Sumitomo Sumitomo Masatomo, founder of Monjuin Shiigaki associated with the Monjuin Shiigaki letter. The Japanese terms the House of Sumitomo (Photo: certain teaching exists, and it is impossible to fully understand family, the ebb and flow of fortunes of the mining business in the for integrity, sound management and easy gains used in the Sumitomo Historical Archive) philosophy just by reading its text. Besshi hills of Iyo Province (now Ehime Prefecture) affects the Business Principles are all contemporary terms coined during Everyone, at some time, finds himself, or herself, unable to fortunes of the House of Sumitomo. The business shall therefore or after the Meiji era. The Monjuin Shiigaki revealed the DNA to Be Acquired as Appropriate decide what to do. At those times, employees might want to refer to past achievements and aim to generate future profits to essence of business as the founder of the House of Sumitomo look back over the company’s history, using the Sumitomo bring about even greater prosperity.” intended to explicate it and our Meiji era forerunners drew from According to the Role and Responsibility Business Spirit as a starting point, and see how their This article, outlining the business philosophy of focusing on that a set of universal teachings. The younger the age group, the lower the rate of penetration of forerunners thought and acted, and the outcomes they created. core business, was omitted in 1927 after the Besshi Copper the Sumitomo Business Spirit. But this is only to be expected. They could gain insight by learning in this way about the Mine was removed from direct administration of the Sumitomo People’s roles change with the positions they hold, and with conduct of forerunners behind the Sumitomo Business Spirit. family and the Sumitomo Group branched into manufacturing their age. Those in their 20s mainly undertake tasks within their Other Sumitomo Group companies are also globalizing, and finance. But I believe this third article stressing the own workplaces and often seek instructions from their meaning there are increasing opportunities for employees importance of focusing on core business as a fountainhead for supervisors. Situations where they make their own decisions are around the world to hear about the Sumitomo Business Spirit. the Sumitomo Group is especially relevant to SMM. limited. Managers, on the other hand, have more to do with Employees of the Sumitomo Group overseas, with varying I truly hope to see SMM help to enhance the Sumitomo brand people outside the workplace and have greater responsibilities. cultures and values, sometimes come forward saying they want by leading the way for the rest of the group, as you would Teruaki Sueoka to learn about Sumitomo history. They say they want to know expect of such a fountainhead. Assistant Curator, Sumitomo Historical Archives One such responsibility is their responsibility to the company. Special Adviser, Niihama City Hirose Memorial Museum Another, as in the case of Sumitomo Metal Mining (SMM), about the managers and engineers who have worked for their

11 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 12 Special The Product Creation Spirit Leading to the World’s Highest Level Feature Performance 2 —Challenges in Developing Positive Electrode Materials for Lithium-Ion Secondary Batteries SMM produces nickel hydroxide and lithium nickel oxide (LNO) as positive electrode materials for secondary batteries. Isao Abe, head of the Materials Division’s NCA Project Department, was involved in the development of LNO supplied by SMM to Panasonic for use in its lithium-ion (Li-ion) secondary battery with the world’s top level of energy density. He helps tell the story of the development.

People involved in the development and mass production of positive electrode materials

Starting Development of Battery Materials Mass Production Success and Seeing the Overcoming Issues to Achieve Mass synthesis technology, used in the materials business, and with SMM Characteristics Realities Production with Business Partners basic sintering technology, used in the non-ferrous metals business. In 1991, Sony became the first in the world to commercialize SMM then started on development of LNO for automotive It was in 2004 that the head of Panasonic’s battery research The fourth was the sincere attitude toward the pursuit of a Li-ion secondary battery, for its Handycam® camcorders. application together with an automotive parts manufacturer. center approached SMM about developing positive product creation that came from deep down inside the The positive electrode material used in Sony’s Li-ion After five years of research and development, we reached electrode materials for its Li-ion secondary batteries. Price people who were involved in the battery materials business. batteries at the time was lithium cobalt oxide (LCO). At the mass production stage. However, the cost of a battery competition in the Li-ion secondary battery market at the This is the attitude of looking out for the tiniest changes around the same time, SMM also commenced development had soared far above what we had envisioned during time was intense and Panasonic had plans to develop a new happening to the material, which even measuring of positive electrode materials for secondary batteries. First, development. Demand consequently came to only 1/20 of high-performance battery as a way to achieve differentiation. instruments cannot pick up, and then applying those we rushed to develop LCO, the dominant material on the what we had foreseen. Panasonic had already cooperated with SMM on battery observations to bring about quality and yield improvements. market back then, and even reached the trial mass The experience taught Abe how crucial it was for positive electrode material development for many years and It is also the attitude of looking to fulfill the constantly production stage. But unable to produce characteristic engineers to lower costs while maintaining the same level of admired our approach to development and advanced changing and mounting requirements of customers in regard properties, we started exploring the other option open to performance. He explains, “Saving on costs means not using technological capabilities. The company therefore chose to quality, while pursuing the limits of production equipment us—LNO. No other companies had yet tried to develop LNO as many resources, including people, and not using as much SMM to be its partner in developing positive electrode and using it to the full in order to minimize resource and technology, and its potential for dramatically improving the energy. It also contributes to competitiveness, as well as to materials for the batteries. And so the challenge began, the energy usage. performance (energy density and cycle life) of secondary environmental preservation. It doesn’t matter how well your companies working side-by-side toward the development Panasonic’s Li-ion secondary battery, the culmination of all batteries had been discovered. Moreover, LNO contains product performs to the specs demanded by the customer and mass production of the battery. these efforts by the people involved, continues to boast nickel as a primary material, for which SMM has an and society; if it’s too expensive, the product won’t expand in The main technical challenges in realizing mass production energy density at the world’s top level even in 2014, eight advantage due to working with it in its mineral resources and the market.” of a Li-ion secondary battery using LNO were improvements years on from its launch. Applications have also expanded smelting and refining businesses. For these reasons, SMM to charging characteristics and safety. SMM took around two from the initial PC domain to electric vehicles, and demand is focused on LNO development. years to develop new technology that would improve the expected to keep growing. Note: Handycam® is a registered trademark of Sony Corporation. charging characteristics of the positive electrode materials. A characteristic of SMM is that we have three core Meanwhile, Panasonic overcame safety issues using its own businesses—mineral resources, smelting and refining, and Battery Construction And proprietary technology. A Li-ion secondary battery with high materials. This nickel-based secondary battery positive Positive Electrode Materials energy density went on sale in 2006. electrode materials business takes full advantage of SMM’s Besides overcoming these technical issues, a number of strengths as a combination of all three. Cross-section structure LNO SMM’s unique advantages contributed to the success of and manufacturing is used in mass production. The first was the persistence of SMM’s development Positive terminal Vent the positive electrode PTC Anti-explosion valve engineers, including Abe, in insisting upon considerations for Insulating gasket Positive electrode lead future mass production. This was based upon the Separators understanding that a product will only be able to make a Insulating plate Negative electrode contribution to the company, to customers and to society Negative once it can be mass produced, an important point that Abe, By mass producing materials the market Case electrode lead too, stressed to his employees. needs at low cost, I hope we create Positive The second advantage was that SMM smelted and refined more employment and thereby make a Insulating plate electrode nickel from the ore stage and therefore had the ability to contribution to the city of Niihama, where secure a stable supply of high-quality nickel needed as the I was born. raw material for LNO mass production. Isao Abe The third advantage was that SMM was already in Head of the NCA Project Dept., Materials Div. possession of two key technologies—advanced powder

13 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 14 Special The Product Creation Spirit Leading to the World’s Highest Level Feature Performance 2 —Challenges in Developing Positive Electrode Materials for Lithium-Ion Secondary Batteries SMM produces nickel hydroxide and lithium nickel oxide (LNO) as positive electrode materials for secondary batteries. Isao Abe, head of the Materials Division’s NCA Project Department, was involved in the development of LNO supplied by SMM to Panasonic for use in its lithium-ion (Li-ion) secondary battery with the world’s top level of energy density. He helps tell the story of the development.

People involved in the development and mass production of positive electrode materials

Starting Development of Battery Materials Mass Production Success and Seeing the Overcoming Issues to Achieve Mass synthesis technology, used in the materials business, and with SMM Characteristics Realities Production with Business Partners basic sintering technology, used in the non-ferrous metals business. In 1991, Sony became the first in the world to commercialize SMM then started on development of LNO for automotive It was in 2004 that the head of Panasonic’s battery research The fourth was the sincere attitude toward the pursuit of a Li-ion secondary battery, for its Handycam® camcorders. application together with an automotive parts manufacturer. center approached SMM about developing positive product creation that came from deep down inside the The positive electrode material used in Sony’s Li-ion After five years of research and development, we reached electrode materials for its Li-ion secondary batteries. Price people who were involved in the battery materials business. batteries at the time was lithium cobalt oxide (LCO). At the mass production stage. However, the cost of a battery competition in the Li-ion secondary battery market at the This is the attitude of looking out for the tiniest changes around the same time, SMM also commenced development had soared far above what we had envisioned during time was intense and Panasonic had plans to develop a new happening to the material, which even measuring of positive electrode materials for secondary batteries. First, development. Demand consequently came to only 1/20 of high-performance battery as a way to achieve differentiation. instruments cannot pick up, and then applying those we rushed to develop LCO, the dominant material on the what we had foreseen. Panasonic had already cooperated with SMM on battery observations to bring about quality and yield improvements. market back then, and even reached the trial mass The experience taught Abe how crucial it was for positive electrode material development for many years and It is also the attitude of looking to fulfill the constantly production stage. But unable to produce characteristic engineers to lower costs while maintaining the same level of admired our approach to development and advanced changing and mounting requirements of customers in regard properties, we started exploring the other option open to performance. He explains, “Saving on costs means not using technological capabilities. The company therefore chose to quality, while pursuing the limits of production equipment us—LNO. No other companies had yet tried to develop LNO as many resources, including people, and not using as much SMM to be its partner in developing positive electrode and using it to the full in order to minimize resource and technology, and its potential for dramatically improving the energy. It also contributes to competitiveness, as well as to materials for the batteries. And so the challenge began, the energy usage. performance (energy density and cycle life) of secondary environmental preservation. It doesn’t matter how well your companies working side-by-side toward the development Panasonic’s Li-ion secondary battery, the culmination of all batteries had been discovered. Moreover, LNO contains product performs to the specs demanded by the customer and mass production of the battery. these efforts by the people involved, continues to boast nickel as a primary material, for which SMM has an and society; if it’s too expensive, the product won’t expand in The main technical challenges in realizing mass production energy density at the world’s top level even in 2014, eight advantage due to working with it in its mineral resources and the market.” of a Li-ion secondary battery using LNO were improvements years on from its launch. Applications have also expanded smelting and refining businesses. For these reasons, SMM to charging characteristics and safety. SMM took around two from the initial PC domain to electric vehicles, and demand is focused on LNO development. years to develop new technology that would improve the expected to keep growing. Note: Handycam® is a registered trademark of Sony Corporation. charging characteristics of the positive electrode materials. A characteristic of SMM is that we have three core Meanwhile, Panasonic overcame safety issues using its own businesses—mineral resources, smelting and refining, and Battery Construction And proprietary technology. A Li-ion secondary battery with high materials. This nickel-based secondary battery positive Positive Electrode Materials energy density went on sale in 2006. electrode materials business takes full advantage of SMM’s Besides overcoming these technical issues, a number of strengths as a combination of all three. Cross-section structure LNO SMM’s unique advantages contributed to the success of and manufacturing is used in mass production. The first was the persistence of SMM’s development Positive terminal Vent the positive electrode PTC Anti-explosion valve engineers, including Abe, in insisting upon considerations for Insulating gasket Positive electrode lead future mass production. This was based upon the Separators understanding that a product will only be able to make a Insulating plate Negative electrode contribution to the company, to customers and to society Negative once it can be mass produced, an important point that Abe, By mass producing materials the market Case electrode lead too, stressed to his employees. needs at low cost, I hope we create Positive The second advantage was that SMM smelted and refined more employment and thereby make a Insulating plate electrode nickel from the ore stage and therefore had the ability to contribution to the city of Niihama, where secure a stable supply of high-quality nickel needed as the I was born. raw material for LNO mass production. Isao Abe The third advantage was that SMM was already in Head of the NCA Project Dept., Materials Div. possession of two key technologies—advanced powder

13 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 14 Initiatives in the Six Key CSR Areas Basic Approach

SMM Group business centers on the utilization of the Earth’s valuable, yet limited, resources. Effective use of resources Effective Use of Resources is therefore considered an important issue for management as we seek sustainable business development. Based on this understanding, the SMM Group has included “effective use of resources” as one of its Six Key CSR Areas and is advancing recycling efforts. As the Vision for 2020 depicts “a company that generates resources using innovative technology,” we are developing technologies that will assist with the effective utilization of minerals which have not Vision A company that generates resources using innovative technology previously been converted into resources, such as low-grade and complex ores. We are also endeavoring to recover for 2020  Business development through technologies to process low-grade/hard-to-process ores and recycle precious and other valuable metals from items such as used home appliances and electronic devices, and develop and refine recovery technologies. materials from urban sources

Perspective Aim Target FY2013 Achievements Challenges FY2014 Plan Nickel exploration and development on ● Conducted environmental impact assessments necessary ● Finalization of rights acquired for ● Quickly reach a resolution of the lawsuit relating to new mining zones where mining the Solomon Islands for acquiring mining rights for existing mining zones new mining zones and unified rights have been acquired ● A lawsuit to finalize rights acquired for new mining zones development of new and existing ● Commence exploration of new mining zones where mining rights have been acquired is currently before the High Court mining zones Develop the Sierra Gorda Mine (begin ● Strengthened the management framework and advanced ● Production to commence in 2014, ● Complete the plant and start operations the project as indicated in revised plans

Acquisition and development of new resources production in 2014)

Advance the Taganito Project (start ● Started commercial production in October 2013 ● Establishment of a system for full ● Move into full production operations in 2013) production

Develop mineral processing technology ● Advanced development of mineral processing technology ● Building upon technology for ● Continue basic tests to improve separation for extracting low-impurity/high-grade for separating and recovering copper/molybdenum separating copper/molybdenum copper concentrates from high-impurity and application to mines copper ores Effective use of refining technologies processto low-grade/ hard-to-process ores Recover raw materials for iron ● Started pilot trials for recovery of chromite from nickel ● Establishment of processes for a ● Establish processes for chromite recovery oxide ores pilot-scale operation ● Start operations and establish processes at the iron recovery pilot plant manufacturing from nickel oxide ores ● Effective resources use natural of Began construction of a pilot facility for recovering hematite from nickel oxide ores as a raw material for iron and steel manufacturing Recover previously ignored elements in ● Started pilot trials for recovery of scandium from nickel ● Establishment of processes for a ● Verify processes and carry out trial production at the pilot facility ores besides targeted metals oxide ore processing pilot-scale operation Recover elements metals target besides

Establish secondary battery recycling ● Established basic processes for recycling Ni-MH batteries ● Establishment even more efficient ● Develop low-cost processes ● processes Started on further development of lower-costs processes recycling processes

Utilization Advance processing of secondary copper ● Advanced establishment of facilities for processing ● Further promotion of copper ● Further promotion of copper recovery from secondary materials of recycled secondary materials recovery and processing raw material at the Toyo Smelter & ● materials Refinery Processed recycled materials almost according to plan Advance recovery of valuable metals from ● Examined and introduced intermediate processing ● Increasing processing capability ● Formulate a plan for increasing processing capability secondary materials technologies for recovering valuable metals from urban mines

● ● ● Effective use Establish technology for maintaining or Gathered data on slag for JIS revisions to be made via the JIS revisions relating to Cooperate on drafting JIS revisions Japan Mining Industry Association copper/ferro-nickel slag for concrete of by improving slag quality ● products Started studying and testing the impact of ferro-nickel slag to be made via the Japan Mining on marine ecosystems Industry Association

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 The SMM Group is taking active steps toward making effective use of resources. Targets are set and managed for In FY2013, the development of copper resources at Sierra Gorda, Chile, and nickel production in Taganito, in each key area and I believe progress has been made through activities from the previous year. I do, however, feel the Philippines, were projects of high significance. The key here is the development of technology for that more explanation is required about the achievements; for example, specifics about strengthening the recovering as many valuable metals as possible from low-grade ores and putting them to effective use. For management framework for developing the Sierra Gorda Mine. Not everything can be explained in detail, of course, example, besides establishing technology for economically recovering the mere 1% nickel content from nickel but methods could be found to achieve more effective information disclosure, such as clarifying the significance ores, we have started operation of a pilot plant in the Philippines where we carry out verification testing of (materiality) of each activity in relation to the overall activity of the SMM Group and explaining the more significant technology with the aim of recovering as much of the 40% iron and 1-2% chromium content in residues. areas in detail. Employing our own original technologies to make effective use of resources is the very heart of our business, In your view, what does society require in regard to the effective use of resources? and we believe that we can both contribute to society and enhance our corporate value by pursuing this in a sincere manner. One global CSR trend today involves re-examining the entire supply chain from a corporate social responsibility perspective, and there is a growing view that not only the financial value, but also the social value of the entire supply Response to Stakeholder Comments chain needs to be enhanced. Having three core businesses in mineral resources, smelting and refining, and Making effective use of resources along the entire supply chain is another issue we must consider. Nickel materials makes it all the more important that the SMM Group adopts such an approach involving management of extracted from ores is used to make lithium nickel oxide, a cathode material for secondary batteries used in the supply chain. The SMM Group advances activities in each of the core areas—mineral resources, smelting and automobiles. We have developed technology and worked with customers to establish a system for recycling, Katsuhiko Kokubu refining, and materials—with appropriate goals, but it will also be vital to take an integrated approach to determining allowing us to retrieve materials from batteries that have reached the end of their lives and turn them into new Harumasa Kurokawa Professor, Graduate School of Business how to collectively manage the socially important matter of effective use of resources over the value chain as a Chairman, Efficient Resource Utilization Subcommittee; Administration, Kobe University resources. We will continue our efforts to consider resource recycling looking at the entire supply chain and Managing Executive Officer; whole. will keep exploring the potential for new activities. General Manager, Technology Div.

15 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 16 Initiatives in the Six Key CSR Areas Basic Approach

SMM Group business centers on the utilization of the Earth’s valuable, yet limited, resources. Effective use of resources Effective Use of Resources is therefore considered an important issue for management as we seek sustainable business development. Based on this understanding, the SMM Group has included “effective use of resources” as one of its Six Key CSR Areas and is advancing recycling efforts. As the Vision for 2020 depicts “a company that generates resources using innovative technology,” we are developing technologies that will assist with the effective utilization of minerals which have not Vision A company that generates resources using innovative technology previously been converted into resources, such as low-grade and complex ores. We are also endeavoring to recover for 2020  Business development through technologies to process low-grade/hard-to-process ores and recycle precious and other valuable metals from items such as used home appliances and electronic devices, and develop and refine recovery technologies. materials from urban sources

Perspective Aim Target FY2013 Achievements Challenges FY2014 Plan Nickel exploration and development on ● Conducted environmental impact assessments necessary ● Finalization of rights acquired for ● Quickly reach a resolution of the lawsuit relating to new mining zones where mining the Solomon Islands for acquiring mining rights for existing mining zones new mining zones and unified rights have been acquired ● A lawsuit to finalize rights acquired for new mining zones development of new and existing ● Commence exploration of new mining zones where mining rights have been acquired is currently before the High Court mining zones Develop the Sierra Gorda Mine (begin ● Strengthened the management framework and advanced ● Production to commence in 2014, ● Complete the plant and start operations the project as indicated in revised plans

Acquisition and development of new resources production in 2014)

Advance the Taganito Project (start ● Started commercial production in October 2013 ● Establishment of a system for full ● Move into full production operations in 2013) production

Develop mineral processing technology ● Advanced development of mineral processing technology ● Building upon technology for ● Continue basic tests to improve separation for extracting low-impurity/high-grade for separating and recovering copper/molybdenum separating copper/molybdenum copper concentrates from high-impurity and application to mines copper ores Effective use of refining technologies processto low-grade/ hard-to-process ores Recover raw materials for iron ● Started pilot trials for recovery of chromite from nickel ● Establishment of processes for a ● Establish processes for chromite recovery oxide ores pilot-scale operation ● Start operations and establish processes at the iron recovery pilot plant manufacturing from nickel oxide ores ● Effective resources use natural of Began construction of a pilot facility for recovering hematite from nickel oxide ores as a raw material for iron and steel manufacturing Recover previously ignored elements in ● Started pilot trials for recovery of scandium from nickel ● Establishment of processes for a ● Verify processes and carry out trial production at the pilot facility ores besides targeted metals oxide ore processing pilot-scale operation Recover elements metals target besides

Establish secondary battery recycling ● Established basic processes for recycling Ni-MH batteries ● Establishment even more efficient ● Develop low-cost processes ● processes Started on further development of lower-costs processes recycling processes

Utilization Advance processing of secondary copper ● Advanced establishment of facilities for processing ● Further promotion of copper ● Further promotion of copper recovery from secondary materials of recycled secondary materials recovery and processing raw material at the Toyo Smelter & ● materials Refinery Processed recycled materials almost according to plan Advance recovery of valuable metals from ● Examined and introduced intermediate processing ● Increasing processing capability ● Formulate a plan for increasing processing capability secondary materials technologies for recovering valuable metals from urban mines

● ● ● Effective use Establish technology for maintaining or Gathered data on slag for JIS revisions to be made via the JIS revisions relating to Cooperate on drafting JIS revisions Japan Mining Industry Association copper/ferro-nickel slag for concrete of by improving slag quality ● products Started studying and testing the impact of ferro-nickel slag to be made via the Japan Mining on marine ecosystems Industry Association

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 The SMM Group is taking active steps toward making effective use of resources. Targets are set and managed for In FY2013, the development of copper resources at Sierra Gorda, Chile, and nickel production in Taganito, in each key area and I believe progress has been made through activities from the previous year. I do, however, feel the Philippines, were projects of high significance. The key here is the development of technology for that more explanation is required about the achievements; for example, specifics about strengthening the recovering as many valuable metals as possible from low-grade ores and putting them to effective use. For management framework for developing the Sierra Gorda Mine. Not everything can be explained in detail, of course, example, besides establishing technology for economically recovering the mere 1% nickel content from nickel but methods could be found to achieve more effective information disclosure, such as clarifying the significance ores, we have started operation of a pilot plant in the Philippines where we carry out verification testing of (materiality) of each activity in relation to the overall activity of the SMM Group and explaining the more significant technology with the aim of recovering as much of the 40% iron and 1-2% chromium content in residues. areas in detail. Employing our own original technologies to make effective use of resources is the very heart of our business, In your view, what does society require in regard to the effective use of resources? and we believe that we can both contribute to society and enhance our corporate value by pursuing this in a sincere manner. One global CSR trend today involves re-examining the entire supply chain from a corporate social responsibility perspective, and there is a growing view that not only the financial value, but also the social value of the entire supply Response to Stakeholder Comments chain needs to be enhanced. Having three core businesses in mineral resources, smelting and refining, and Making effective use of resources along the entire supply chain is another issue we must consider. Nickel materials makes it all the more important that the SMM Group adopts such an approach involving management of extracted from ores is used to make lithium nickel oxide, a cathode material for secondary batteries used in the supply chain. The SMM Group advances activities in each of the core areas—mineral resources, smelting and automobiles. We have developed technology and worked with customers to establish a system for recycling, Katsuhiko Kokubu refining, and materials—with appropriate goals, but it will also be vital to take an integrated approach to determining allowing us to retrieve materials from batteries that have reached the end of their lives and turn them into new Harumasa Kurokawa Professor, Graduate School of Business how to collectively manage the socially important matter of effective use of resources over the value chain as a Chairman, Efficient Resource Utilization Subcommittee; Administration, Kobe University resources. We will continue our efforts to consider resource recycling looking at the entire supply chain and Managing Executive Officer; whole. will keep exploring the potential for new activities. General Manager, Technology Div.

15 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 16 Effective Use of Resources Initiatives for Effective Use of Resources

Environmental Impact Reductions from Effective Making Effective Use of Low-Grade Ores Recycling of Nickel Metal Hydride Batteries Using Resources Effectively through Recycling Utilization of Resources The plant of Coral Bay Nickel Corporation (CBNC)2 commenced SMM is engaged in the manufacture and sale of positive Besides procuring copper, zinc and precious metal scrap from Slag as a Recycled Material full-scale operations in April 2005. Adjacent to the plant, the Rio electrode materials for the nickel metal hydride (Ni-MH) scrap dealers, the SMM Group recovers precious metals and Copper slag is a by-product produced during smelting at the Tuba Nickel Mining Corporation nickel mine has excavated batteries employed in hybrid vehicles. Since FY2000, we have other valuable metals from electric arc furnace dust, used Toyo Smelter & Refinery, which manufactures electrolytic nickel oxide ore since its opening. However, while high-grade also been conducting research into the recycling of Ni-MH printed circuit boards and other such items. copper. The main use for copper slag (almost two thirds of the oxide ore buried deep in the earth was being mined, low-grade batteries. With the growing popularity of fuel-efficient hybrid In FY2013, the processing of secondary copper materials and total volume) is cement production in Japan and overseas. With oxide ore with low nickel content existing close to the surface vehicles, demand for Ni-MH batteries, an essential component, electric arc furnace dust was on par with FY2012, as was the an iron content of around 40%, copper slag is widely used as a was not extracted. Because this low-grade oxide ore is said to has jumped. recycled materials ratio at about 3.5% (see Table 1). source of iron for cement. Copper slag output in FY2013 was make up around 70% of all nickel oxide ore resources SMM anticipated the launch of a used Ni-MH battery Recovery and recycling of copper and its alloys was readily around 786 kilotons. The volume of copper slag sold was worldwide, there was global demand for the development of collection and recycling operation, and therefore, in 2010, it pursued even before the 3Rs (Reduction, Reuse and Recycling) around 948 kilotons. technology that would allow it to be processed. commenced the recycling of nickel electrode plates at its were advocated because of their high scrap value. All the Hyuga Smelting manufactures ferro-nickel, a material used in Recovering nickel from this low-grade oxide ore requires the Niihama Nickel Refinery, becoming the first company in the copper shavings are recycled as raw material by manufacturers stainless steel. It generated around 849 kilotons of ferro-nickel use of high-pressure acid leaching (HPAL), a hydrometallurgical world to realize “battery to battery” recycling. of electric cables and wrought copper and copper alloy slag in FY2013. Around 763 kilotons of ferro-nickel slag was technique. Large-scale production using this process demands By applying nickel manufacturing technologies to the products. sold as a recycled material, its main destination being blast a high degree of equipment engineering and operational skill. recycling of materials, we are working to ensure effective use of Similarly, SMM collects waste cables and used copper pipes furnaces for steelmaking. With magnesia content of around Industry players the world over had been struggling with resources and thereby contribute to environmental preservation. and converts the copper into new resources. The output of 30%, ferro-nickel slag is used as a source of magnesia for blast application of HPAL technology, but SMM overcame many electrolytic copper from recycled copper materials in FY2013 furnace flux. By taking advantage of their respective features, technical hurdles to become the first company in the world to was approximately 68 kilotons, accounting for 17.2% of total ■ Ni-MH Battery Recycling: Flow Diagram both copper slag and ferro-nickel slag are also used as successfully apply HPAL technology to commercial production. output, which was a slight increase from FY2012 (17.0%). substitutes for natural sand in concrete aggregate and public Turning previously unusable low-grade ore into resources also As for zinc materials, the Harima Smelter produces prime End-of-life vehicles works in ports and harbors. has tremendous social significance. western grade zinc using crude zinc oxide produced from In order to make full use of this HPAL technology, SMM processing electric arc furnace dust at Shisaka Smelting as the embarked on its Taganito Project in 2009. The project entails the raw material. Zero Emissions Initiatives at Ome District Division construction, in the Taganito District on Mindanao Island in the Dismantling and removal of Ni-MH batteries Supply chain management is indispensable for achieving zero ■ Philippines, of a large HPAL process plant with an annual Table 1 Ratio of Recycled Materials Used emissions1. Instead of limiting efforts to minimizing industrial production of 30 kilotons of nickel. The project has been waste emissions during the production stage, primarily through FY 2010 2011 2012 2013 progressing well, and operations got underway in autumn 2013. Pre-processing/material sorting the design of environmentally-friendly production processes, we Total volume of materials used (kt) 6,861 7,107 7,731 7,850 must also ensure that considerations toward the environmental impact of consumption and disposal are incorporated into the Recycled materials (kt) 204 218 263 271 Recycled materials selection and production processes for raw materials. 3.0 3.1 3.4 3.5 Chemical processing ratio (%) The Ome District Division has been pursuing environmental (Recovery of nickel/cobalt and rare earths) impact reductions through waste reduction since FY2001. Zero emissions were achieved in FY2003 as the division collaborated Oxide Ores Only with a number of other companies to recycle waste into High-purity resources, and this status has been maintained since (except cobalt metal In April 2012, Harima Smelter switched to an oxide ores only for FY2006). Sulfuric acid operation to reduce waste and promote recycling. This involved SMM Nickel Employees are highly committed to waste reductions and their smelting zinc metal without imported sulfide ores through the efforts in support of thorough waste sorting and recycling processing of only recycled oxide ore materials. Cobalt chemicals contributed to continued zero emissions in FY2013, with 0.006% The oxide ores used mainly consist of zinc and other materials of waste disposed in landfills. Piles of low-grade ore at the Rio Tuba Nickel Mining which group company Shisaka Smelting recovers through the processing of dust generated by steel manufacturers that Battery material manufacturing operate electric furnaces. Using such recycled materials,

1. Zero emissions: 2. CBNC: Capital: 587.5 million Philippine pesos. Shareholders: Sumitomo Metal Harima Smelter has introduced technology for manufacturing When less than 1% of total waste is disposed in landfills. Mining Co., Ltd. (54%), Mitsui & Co., Ltd. (18%), Sojitz Corp. (18%), Rio Tuba zinc material using the imperial smelting process (ISP), a Landfill disposal rate=volume of waste disposed in landfills/total volume of Nickel Mining Corp. (10%). Head Office: Rio Tuba, Bataraza, Palawan waste disposed × 100 Province, Philippines. method for simultaneous smelting of lead and zinc, and is HV battery production working to improve the efficiency of operations. The Harima Smelter will continue working to reduce waste in Japan and contribute to society through the recovery and HV production recycling of zinc and other valuable metals.

17 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 18 Effective Use of Resources Initiatives for Effective Use of Resources

Environmental Impact Reductions from Effective Making Effective Use of Low-Grade Ores Recycling of Nickel Metal Hydride Batteries Using Resources Effectively through Recycling Utilization of Resources The plant of Coral Bay Nickel Corporation (CBNC)2 commenced SMM is engaged in the manufacture and sale of positive Besides procuring copper, zinc and precious metal scrap from Slag as a Recycled Material full-scale operations in April 2005. Adjacent to the plant, the Rio electrode materials for the nickel metal hydride (Ni-MH) scrap dealers, the SMM Group recovers precious metals and Copper slag is a by-product produced during smelting at the Tuba Nickel Mining Corporation nickel mine has excavated batteries employed in hybrid vehicles. Since FY2000, we have other valuable metals from electric arc furnace dust, used Toyo Smelter & Refinery, which manufactures electrolytic nickel oxide ore since its opening. However, while high-grade also been conducting research into the recycling of Ni-MH printed circuit boards and other such items. copper. The main use for copper slag (almost two thirds of the oxide ore buried deep in the earth was being mined, low-grade batteries. With the growing popularity of fuel-efficient hybrid In FY2013, the processing of secondary copper materials and total volume) is cement production in Japan and overseas. With oxide ore with low nickel content existing close to the surface vehicles, demand for Ni-MH batteries, an essential component, electric arc furnace dust was on par with FY2012, as was the an iron content of around 40%, copper slag is widely used as a was not extracted. Because this low-grade oxide ore is said to has jumped. recycled materials ratio at about 3.5% (see Table 1). source of iron for cement. Copper slag output in FY2013 was make up around 70% of all nickel oxide ore resources SMM anticipated the launch of a used Ni-MH battery Recovery and recycling of copper and its alloys was readily around 786 kilotons. The volume of copper slag sold was worldwide, there was global demand for the development of collection and recycling operation, and therefore, in 2010, it pursued even before the 3Rs (Reduction, Reuse and Recycling) around 948 kilotons. technology that would allow it to be processed. commenced the recycling of nickel electrode plates at its were advocated because of their high scrap value. All the Hyuga Smelting manufactures ferro-nickel, a material used in Recovering nickel from this low-grade oxide ore requires the Niihama Nickel Refinery, becoming the first company in the copper shavings are recycled as raw material by manufacturers stainless steel. It generated around 849 kilotons of ferro-nickel use of high-pressure acid leaching (HPAL), a hydrometallurgical world to realize “battery to battery” recycling. of electric cables and wrought copper and copper alloy slag in FY2013. Around 763 kilotons of ferro-nickel slag was technique. Large-scale production using this process demands By applying nickel manufacturing technologies to the products. sold as a recycled material, its main destination being blast a high degree of equipment engineering and operational skill. recycling of materials, we are working to ensure effective use of Similarly, SMM collects waste cables and used copper pipes furnaces for steelmaking. With magnesia content of around Industry players the world over had been struggling with resources and thereby contribute to environmental preservation. and converts the copper into new resources. The output of 30%, ferro-nickel slag is used as a source of magnesia for blast application of HPAL technology, but SMM overcame many electrolytic copper from recycled copper materials in FY2013 furnace flux. By taking advantage of their respective features, technical hurdles to become the first company in the world to was approximately 68 kilotons, accounting for 17.2% of total ■ Ni-MH Battery Recycling: Flow Diagram both copper slag and ferro-nickel slag are also used as successfully apply HPAL technology to commercial production. output, which was a slight increase from FY2012 (17.0%). substitutes for natural sand in concrete aggregate and public Turning previously unusable low-grade ore into resources also As for zinc materials, the Harima Smelter produces prime End-of-life vehicles works in ports and harbors. has tremendous social significance. western grade zinc using crude zinc oxide produced from In order to make full use of this HPAL technology, SMM processing electric arc furnace dust at Shisaka Smelting as the embarked on its Taganito Project in 2009. The project entails the raw material. Zero Emissions Initiatives at Ome District Division construction, in the Taganito District on Mindanao Island in the Dismantling and removal of Ni-MH batteries Supply chain management is indispensable for achieving zero ■ Philippines, of a large HPAL process plant with an annual Table 1 Ratio of Recycled Materials Used emissions1. Instead of limiting efforts to minimizing industrial production of 30 kilotons of nickel. The project has been waste emissions during the production stage, primarily through FY 2010 2011 2012 2013 progressing well, and operations got underway in autumn 2013. Pre-processing/material sorting the design of environmentally-friendly production processes, we Total volume of materials used (kt) 6,861 7,107 7,731 7,850 must also ensure that considerations toward the environmental impact of consumption and disposal are incorporated into the Recycled materials (kt) 204 218 263 271 Recycled materials selection and production processes for raw materials. 3.0 3.1 3.4 3.5 Chemical processing ratio (%) The Ome District Division has been pursuing environmental (Recovery of nickel/cobalt and rare earths) impact reductions through waste reduction since FY2001. Zero emissions were achieved in FY2003 as the division collaborated Oxide Ores Only with a number of other companies to recycle waste into High-purity resources, and this status has been maintained since (except cobalt metal In April 2012, Harima Smelter switched to an oxide ores only for FY2006). Sulfuric acid operation to reduce waste and promote recycling. This involved SMM Nickel Employees are highly committed to waste reductions and their smelting zinc metal without imported sulfide ores through the efforts in support of thorough waste sorting and recycling processing of only recycled oxide ore materials. Cobalt chemicals contributed to continued zero emissions in FY2013, with 0.006% The oxide ores used mainly consist of zinc and other materials of waste disposed in landfills. Piles of low-grade ore at the Rio Tuba Nickel Mining which group company Shisaka Smelting recovers through the processing of dust generated by steel manufacturers that Battery material manufacturing operate electric furnaces. Using such recycled materials,

1. Zero emissions: 2. CBNC: Capital: 587.5 million Philippine pesos. Shareholders: Sumitomo Metal Harima Smelter has introduced technology for manufacturing When less than 1% of total waste is disposed in landfills. Mining Co., Ltd. (54%), Mitsui & Co., Ltd. (18%), Sojitz Corp. (18%), Rio Tuba zinc material using the imperial smelting process (ISP), a Landfill disposal rate=volume of waste disposed in landfills/total volume of Nickel Mining Corp. (10%). Head Office: Rio Tuba, Bataraza, Palawan waste disposed × 100 Province, Philippines. method for simultaneous smelting of lead and zinc, and is HV battery production working to improve the efficiency of operations. The Harima Smelter will continue working to reduce waste in Japan and contribute to society through the recovery and HV production recycling of zinc and other valuable metals.

17 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 18 Effective Use of Resources Initiatives in the Six Key CSR Areas Effective Use of Resources

■ Making Effective Use of Low-grade Ores Processes in HPAL Manufacturing Using Resources Effectively through Recycling SMM uses a hydrometallurgical technique called HPAL1 to recover nickel and cobalt from low-grade nickel oxide Nickel ore ores. SMM was the first company in the world to commercialize the HPAL technique, making it possible to turn Besides procuring copper and precious metal scrap previously unused piles of low-grade nickel oxide ore into resources. At present, SMM is conducting operations from scrap dealers, the SMM Group recovers using the HPAL technique at two facilities: Coral Bay Nickel Corporation (CBNC)2 on Palawan Island in the precious metals and other valuable metals from Philippines, and Taganito HPAL Nickel Corporation (THPAL)3 on Mindanao Island in the Philippines. electric furnace dust, waste circuit boards, and other such items. 1. High Pressure Acid Leach (HPAL): A method used to extract nickel and cobalt using sulfuric acid in a high-temperature, high-pressure autoclave (pressure vessel). 2. Coral Bay Nickel Corporation (CBNC) Pre-processing 1 Pre-processing 2 Capital: 587.5 million Philippine pesos. Shareholders: Sumitomo Metal Mining Co., Ltd. (54%), Mitsui & Co., Ltd. (18%), Sojitz Corp. (18%), Rio Tuba Nickel Mining Corp. (10%). Collection of Precious Metals from Urban Mines Head Office: Rio Tuba, Bataraza, Palawan Province, Philippines. 3. Taganito HPAL Nickel Corporation (THPAL) Capital: 4,095 million Philippine pesos. Shareholders: Sumitomo Metal Mining Co., Ltd. (62.5%), Nickel Asia Corporation (22.5%), Mitsui & Co., Ltd. (15%). Head office: Manila, Sulfuric acid Philippines. HPAL 1 HPAL 2 Steam Recovery of Nickel at THPAL

Preliminary neutralization

Counter current decantation ▲Some of the recycled material

Within the Precious Metal Recycling Department at Ohkuchi Neutralization Electronics Co., Ltd., we believe that promoting the recycling of non-renewable resources4 is our social mission. As such, our operations are focused on the Dezincification recovery of precious metals from home appliances and electronics components. The predecessor to our business, Ohkuchi Kinzan, was engaged in recovering gold from ore Final neutralization excavated from mines, from the Meiji period through to the Sulfurization Showa period. It literally brought a “golden age” to the Ohkuchi district. Having inherited the technical strengths Tailing dam cultivated in that age, we use acids and alkalis to efficiently recover and enrich precious metals from various source Mixed sulfide (MS) materials collected from all over Japan, after which we ship (nickel grade: approximately 60%) the unrefined precious metals to the Toyo Smelter & Refinery. Viewed from the perspective of urban mines, ▲View of THPAL Japan is one of the world’s leading resource-rich nations. The THPAL plant was completed in Taganito in the By analyzing the operations of each process, we plan to But as electrical appliance manufacturers endeavor to Philippine province of Surigao del Norte in June 2013 as establish ideal operating conditions in an effort to achieve reduce their costs and as they advance their technologies, SMM’s second HPAL plant, after about three years of even higher rates of nickel recovery. the amount of precious metals used in home appliances construction. As a way of helping to support the future of earth and and electronics components is decreasing, and thus the The raw material used at the plant is low-grade nickel humankind, we hope to further refine the HPAL technology form and sources of the materials we collect will also oxide ore which had previously been underutilized. Using so that we can utilize earth’s limited resources even more change. Amid such a situation, we will make our business the HPAL technique to turn this ore into resources also has effectively. contribute even more to society by improving our recovery tremendous social significance. Manabu Enomoto efficiency, including by changing our processes. Initially after startup, the plant went through various kinds Manager 4. Non-renewable resource: A resource of hardships in establishing operating conditions suited to Production Department that decreases the more it is used, Taganito HPAL Nickel Corporation that is, a resource that decreases by the properties of the Taganito ore, but thanks to the united the rate it is used and whose growth is efforts of Japanese and Filipino workers, these hardships slow. were overcome, and now the plant is operating smoothly.

Kazunari Maeba Manager, Technology Section, Precious Metal Recycling Department Ohkuchi Electronics Co., Ltd.

My Way of My Way of Doing Good I am in charge of general affairs. One of my hobbies is to make pilgrimages to famous temples, and when I do, I Doing Good I am the General Manager of the Administration Department. As a result of our company providing water tanks make it a point to donate some money, albeit a small amount, to benefit society. to the Taira Atacama5 community, the local people were able to run accommodation facilities and earn an In addition, through the Red Cross Society of China, I will continue donating to organizations that provide income. Thanks to these activities, we gained a better understanding of other, and we came to be recognized direct medical care to people in China who are confronting crises such as natural disasters and poverty. and respected as a responsible company. 5. A reservation for indigenous people in northern Chile. There is housing for SMM employees here, and it is an important base for promoting mining projects in northern Chile. Chen Ci Qing Shanghai Sumiko Electronic Paste Co., Ltd. (SEP) Enrique Castro SMM Chile

19 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 20 Effective Use of Resources Initiatives in the Six Key CSR Areas Effective Use of Resources

■ Making Effective Use of Low-grade Ores Processes in HPAL Manufacturing Using Resources Effectively through Recycling SMM uses a hydrometallurgical technique called HPAL1 to recover nickel and cobalt from low-grade nickel oxide Nickel ore ores. SMM was the first company in the world to commercialize the HPAL technique, making it possible to turn Besides procuring copper and precious metal scrap previously unused piles of low-grade nickel oxide ore into resources. At present, SMM is conducting operations from scrap dealers, the SMM Group recovers using the HPAL technique at two facilities: Coral Bay Nickel Corporation (CBNC)2 on Palawan Island in the precious metals and other valuable metals from Philippines, and Taganito HPAL Nickel Corporation (THPAL)3 on Mindanao Island in the Philippines. electric furnace dust, waste circuit boards, and other such items. 1. High Pressure Acid Leach (HPAL): A method used to extract nickel and cobalt using sulfuric acid in a high-temperature, high-pressure autoclave (pressure vessel). 2. Coral Bay Nickel Corporation (CBNC) Pre-processing 1 Pre-processing 2 Capital: 587.5 million Philippine pesos. Shareholders: Sumitomo Metal Mining Co., Ltd. (54%), Mitsui & Co., Ltd. (18%), Sojitz Corp. (18%), Rio Tuba Nickel Mining Corp. (10%). Collection of Precious Metals from Urban Mines Head Office: Rio Tuba, Bataraza, Palawan Province, Philippines. 3. Taganito HPAL Nickel Corporation (THPAL) Capital: 4,095 million Philippine pesos. Shareholders: Sumitomo Metal Mining Co., Ltd. (62.5%), Nickel Asia Corporation (22.5%), Mitsui & Co., Ltd. (15%). Head office: Manila, Sulfuric acid Philippines. HPAL 1 HPAL 2 Steam Recovery of Nickel at THPAL

Preliminary neutralization

Counter current decantation ▲Some of the recycled material

Within the Precious Metal Recycling Department at Ohkuchi Neutralization Electronics Co., Ltd., we believe that promoting the recycling of non-renewable resources4 is our social mission. As such, our operations are focused on the Dezincification recovery of precious metals from home appliances and electronics components. The predecessor to our business, Ohkuchi Kinzan, was engaged in recovering gold from ore Final neutralization excavated from mines, from the Meiji period through to the Sulfurization Showa period. It literally brought a “golden age” to the Ohkuchi district. Having inherited the technical strengths Tailing dam cultivated in that age, we use acids and alkalis to efficiently recover and enrich precious metals from various source Mixed sulfide (MS) materials collected from all over Japan, after which we ship (nickel grade: approximately 60%) the unrefined precious metals to the Toyo Smelter & Refinery. Viewed from the perspective of urban mines, ▲View of THPAL Japan is one of the world’s leading resource-rich nations. The THPAL plant was completed in Taganito in the By analyzing the operations of each process, we plan to But as electrical appliance manufacturers endeavor to Philippine province of Surigao del Norte in June 2013 as establish ideal operating conditions in an effort to achieve reduce their costs and as they advance their technologies, SMM’s second HPAL plant, after about three years of even higher rates of nickel recovery. the amount of precious metals used in home appliances construction. As a way of helping to support the future of earth and and electronics components is decreasing, and thus the The raw material used at the plant is low-grade nickel humankind, we hope to further refine the HPAL technology form and sources of the materials we collect will also oxide ore which had previously been underutilized. Using so that we can utilize earth’s limited resources even more change. Amid such a situation, we will make our business the HPAL technique to turn this ore into resources also has effectively. contribute even more to society by improving our recovery tremendous social significance. Manabu Enomoto efficiency, including by changing our processes. Initially after startup, the plant went through various kinds Manager 4. Non-renewable resource: A resource of hardships in establishing operating conditions suited to Production Department that decreases the more it is used, Taganito HPAL Nickel Corporation that is, a resource that decreases by the properties of the Taganito ore, but thanks to the united the rate it is used and whose growth is efforts of Japanese and Filipino workers, these hardships slow. were overcome, and now the plant is operating smoothly.

Kazunari Maeba Manager, Technology Section, Precious Metal Recycling Department Ohkuchi Electronics Co., Ltd.

My Way of My Way of Doing Good I am in charge of general affairs. One of my hobbies is to make pilgrimages to famous temples, and when I do, I Doing Good I am the General Manager of the Administration Department. As a result of our company providing water tanks make it a point to donate some money, albeit a small amount, to benefit society. to the Taira Atacama5 community, the local people were able to run accommodation facilities and earn an In addition, through the Red Cross Society of China, I will continue donating to organizations that provide income. Thanks to these activities, we gained a better understanding of other, and we came to be recognized direct medical care to people in China who are confronting crises such as natural disasters and poverty. and respected as a responsible company. 5. A reservation for indigenous people in northern Chile. There is housing for SMM employees here, and it is an important base for promoting mining projects in northern Chile. Chen Ci Qing Shanghai Sumiko Electronic Paste Co., Ltd. (SEP) Enrique Castro SMM Chile

19 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 20 Initiatives in the Six Key CSR Areas Basic Approach

Many potentially harmful substances are handled by SMM Group businesses during mineral resource processing and manufacturing. Even a small accident carries the risk of seriously affecting local people and the environment. In order to Environmental Preservation ensure that this risk never materializes, SMM Group emphasizes the need to prevent contamination by supplying A company that meets international anti-global warming standards by using equipment and management systems, and by providing training for relevant staff members. Vision advanced technologies Every year, drills are held in order to learn how to minimize the effects and prevent external impacts in the unlikely event  Zero industrial waste emissions for 2020 an incident did occur. We have also worked to improve facilities, and we are installing a system that automatically shuts off  An expansion of material business concerning products with low environmental impact (creating, storing, the discharge if any abnormalities are detected just before the wastewater port. We will continue to control environmental and saving of energy) risks properly and to strengthen our activities toward risk reduction.

Target FY2013 Achievements Challenges FY2014 Plan ● ● ● ● Continue reducing unit energy In the smelting and refining divisions, implemented energy conservation Develop strategy for reducing CO2 Propose CO2 reduction strategy schemes to management

consumption by 1% compared to the measures equivalent to 0.8% of their energy consumption; and in other emissions • Examine CO2 reduction target levels and an environmental governance divisions, implemented energy conservation measures equivalent to ● Promote investment for energy-saving framework, etc. that are required of SMM by society previous year ● 1.5% (total reduction effect = 4,334 kl/year (crude oil equivalent), 11 themes • Consider revising the energy-saving goals and the criteria for determining Reduce CO2 emissions by the entire SMM kilotons/year (CO2 equivalent)) investment profitability Group ● Unit energy consumption of the SMM Group in Japan worsened by 3.1% • Consider contributions in renewable energy and the feasibility of offsets and from FY2012 levels due to such factors as a degradation of the metal in other initiatives raw material ore and a scheduled suspension of operations ● With regard to energy-saving themes in the 3-Year Business Plan, examine ● Began collecting standard unit energy data at overseas workplaces in measures for improving investment profitability based on application of the latest order to include their unit energy consumption in the Group aggregate energy-saving technologies from next fiscal year ● Carry out energy conservation measures planned by individual divisions ● Launched a Working Group to Combat Global Warming, and began conducting studies and surveys on reducing CO2 emissions ● The Technology Division conducted business site patrols (of workplaces designated for energy management), and the Engineering Division provided support (for projects included in the three-year investment plan)

Reduce final disposal of industrial waste to zero ● Although sales targets were met for iron pellets—which are a residue ● Recycle iron pellets utilizing the Recycling ● Reduce final disposal by recycling iron pellets utilizing the Recycling Certification ● Further expand sales of iron pellets consisting primarily of the iron remaining after recovering and recycling Certification System System ● zinc from steel dust—new customers for the pellets could not be secured Advance recycling of precipitate from ● In order to utilize the Recycling Certification System implemented by the wastewater treatment at Toyo Smelter & Ministry of the Environment to promote the recycling and reduction of Refinery waste, iron pellets were evaluated by an authorized operator, and as a result it was confirmed that they are recyclable ● The processing facility for promoting the recycling of wastewater precipitate from the Toyo Smelter & Refinery was completed, and began operating in July

Expand sales of materials used in products with ● Achieved plan, with sales reaching 1.7 times base year ● Develop increased production capacity ● Facilitate launch of facilities capable of increased production ● a low environmental impact Expand sales of materials used in products with a low environmental impact (FY2014 target: 3.3 times base year sales; achieve FY2020 target value ahead (1.7 times base year sales; base year: 2011) of schedule)

Advance biodiversity preservation initiatives ● Prepared a pamphlet for deepening people’s understanding of ● Link an appreciation for biodiversity to ● Conduct briefings when visiting each Group workplace in Japan to foster a biodiversity, and distributed it to all group employees in Japan specific initiatives greater understanding of biodiversity ● Endeavored to reduce environmental impact at each workplace by ● Hold seminars on biodiversity for management and senior staff ranked at division implementing an EMS general manager level, and link that awareness to specific initiatives ● At CBNC, adopted comprehensive water management, and promoted ● Continue measures for alleviating environmental impact (reduce emissions of an initiative to supply drinking water to the communities surrounding the chemical substances, conduct comprehensive water management) plant; also conducted environmental measures at CBNC and THPAL ● Check the implementation of environmental management based on international together with upstream businesses standards

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 Topics have been set in accordance with the Group’s business characteristics, and on the whole, a high level of Measures dealing with the issue of global warming, such as those promoting the conservation of energy, are an activity has been conducted. In addition to a high degree of environmental management, SMM’s characteristics have important social responsibility that companies ought to fulfill. Nevertheless, there are getting fewer and fewer been expressed well, for instance, in aspects where your main business has direct bearings on environmental highly effective energy-saving measures in which investment decisions can be made based primarily on preservation, as observed in the sale of materials for products with low environmental impact. Although it was business profitability, and in FY2013 alone, our unit energy consumption ended up worsening in part due to the unfortunate that your unit energy consumption worsened during FY2013, what stood out for me was SMM’s effects of a scheduled suspension of operations. Going forward, I believe we should promote investment approach of actively working to reduce CO2 emissions even as your business expands. You also raise the challenge decisions that consider a variety of merits on a comprehensive, company-wide basis. As for products that of considering the effects of reductions in CO2 emissions from many aspects, not just in terms of investment contribute to energy savings, our products, including wiring materials used in LED lighting and other applications, profitability. I look forward to seeing the progress in your characteristic approach of generating considerable have been recognized for their high efficiency, and have become more widespread during FY2013. Also, our environmental benefit through your products. positive electrode material for secondary batteries is being used in new electric vehicles, and sales are growing. In your view, what does society require in regard to environmental preservation? Response to Stakeholder Comments You have covered the major issues concerning environmental preservation as viewed on a company and group While I agree that environmental impact assessments of the entire material cycle are important, since we are an basis. Besides the initiatives in your respective mineral resources, smelting and refining, and materials businesses, I upstream business, it is quite difficult to conduct such assessments. As for our scope for reducing CO2 Keisuke Takegahara think there will be a growing call for you to demonstrate the outcomes SMM provides to society from a more emissions further, we are studying the possibility of conducting assessments using a simplified method based Takashi Sugiura General Manager, comprehensive perspective of the whole material cycle. I would like to see you present to society a broader form of on coefficients for each product application. We are also considering utilizing renewable energy in collaboration Chairman, Environmental Preservation Subcommittee; Environmental Initiative & Corporate Executive Officer; CSR Executive Officer; Social Responsibility-Support Dept., your Vision for 2020 that also includes upstream and downstream effects. with other companies. In order to contribute to the promotion of energy conservation in society as a whole, we General Manager, Safety & Environment Control Dept. Development Bank of Japan Inc. are exploring various possibilities that can make use of our energy-saving technologies.

21 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 22 Initiatives in the Six Key CSR Areas Basic Approach

Many potentially harmful substances are handled by SMM Group businesses during mineral resource processing and manufacturing. Even a small accident carries the risk of seriously affecting local people and the environment. In order to Environmental Preservation ensure that this risk never materializes, SMM Group emphasizes the need to prevent contamination by supplying A company that meets international anti-global warming standards by using equipment and management systems, and by providing training for relevant staff members. Vision advanced technologies Every year, drills are held in order to learn how to minimize the effects and prevent external impacts in the unlikely event  Zero industrial waste emissions for 2020 an incident did occur. We have also worked to improve facilities, and we are installing a system that automatically shuts off  An expansion of material business concerning products with low environmental impact (creating, storing, the discharge if any abnormalities are detected just before the wastewater port. We will continue to control environmental and saving of energy) risks properly and to strengthen our activities toward risk reduction.

Target FY2013 Achievements Challenges FY2014 Plan ● ● ● ● Continue reducing unit energy In the smelting and refining divisions, implemented energy conservation Develop strategy for reducing CO2 Propose CO2 reduction strategy schemes to management consumption by 1% compared to the measures equivalent to 0.8% of their energy consumption; and in other emissions • Examine CO2 reduction target levels and an environmental governance divisions, implemented energy conservation measures equivalent to ● Promote investment for energy-saving framework, etc. that are required of SMM by society previous year ● 1.5% (total reduction effect = 4,334 kl/year (crude oil equivalent), 11 themes • Consider revising the energy-saving goals and the criteria for determining Reduce CO2 emissions by the entire SMM kilotons/year (CO2 equivalent)) investment profitability Group ● Unit energy consumption of the SMM Group in Japan worsened by 3.1% • Consider contributions in renewable energy and the feasibility of offsets and from FY2012 levels due to such factors as a degradation of the metal in other initiatives raw material ore and a scheduled suspension of operations ● With regard to energy-saving themes in the 3-Year Business Plan, examine ● Began collecting standard unit energy data at overseas workplaces in measures for improving investment profitability based on application of the latest order to include their unit energy consumption in the Group aggregate energy-saving technologies from next fiscal year ● Carry out energy conservation measures planned by individual divisions ● Launched a Working Group to Combat Global Warming, and began conducting studies and surveys on reducing CO2 emissions ● The Technology Division conducted business site patrols (of workplaces designated for energy management), and the Engineering Division provided support (for projects included in the three-year investment plan)

Reduce final disposal of industrial waste to zero ● Although sales targets were met for iron pellets—which are a residue ● Recycle iron pellets utilizing the Recycling ● Reduce final disposal by recycling iron pellets utilizing the Recycling Certification ● Further expand sales of iron pellets consisting primarily of the iron remaining after recovering and recycling Certification System System ● zinc from steel dust—new customers for the pellets could not be secured Advance recycling of precipitate from ● In order to utilize the Recycling Certification System implemented by the wastewater treatment at Toyo Smelter & Ministry of the Environment to promote the recycling and reduction of Refinery waste, iron pellets were evaluated by an authorized operator, and as a result it was confirmed that they are recyclable ● The processing facility for promoting the recycling of wastewater precipitate from the Toyo Smelter & Refinery was completed, and began operating in July

Expand sales of materials used in products with ● Achieved plan, with sales reaching 1.7 times base year ● Develop increased production capacity ● Facilitate launch of facilities capable of increased production ● a low environmental impact Expand sales of materials used in products with a low environmental impact (FY2014 target: 3.3 times base year sales; achieve FY2020 target value ahead (1.7 times base year sales; base year: 2011) of schedule)

Advance biodiversity preservation initiatives ● Prepared a pamphlet for deepening people’s understanding of ● Link an appreciation for biodiversity to ● Conduct briefings when visiting each Group workplace in Japan to foster a biodiversity, and distributed it to all group employees in Japan specific initiatives greater understanding of biodiversity ● Endeavored to reduce environmental impact at each workplace by ● Hold seminars on biodiversity for management and senior staff ranked at division implementing an EMS general manager level, and link that awareness to specific initiatives ● At CBNC, adopted comprehensive water management, and promoted ● Continue measures for alleviating environmental impact (reduce emissions of an initiative to supply drinking water to the communities surrounding the chemical substances, conduct comprehensive water management) plant; also conducted environmental measures at CBNC and THPAL ● Check the implementation of environmental management based on international together with upstream businesses standards

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 Topics have been set in accordance with the Group’s business characteristics, and on the whole, a high level of Measures dealing with the issue of global warming, such as those promoting the conservation of energy, are an activity has been conducted. In addition to a high degree of environmental management, SMM’s characteristics have important social responsibility that companies ought to fulfill. Nevertheless, there are getting fewer and fewer been expressed well, for instance, in aspects where your main business has direct bearings on environmental highly effective energy-saving measures in which investment decisions can be made based primarily on preservation, as observed in the sale of materials for products with low environmental impact. Although it was business profitability, and in FY2013 alone, our unit energy consumption ended up worsening in part due to the unfortunate that your unit energy consumption worsened during FY2013, what stood out for me was SMM’s effects of a scheduled suspension of operations. Going forward, I believe we should promote investment approach of actively working to reduce CO2 emissions even as your business expands. You also raise the challenge decisions that consider a variety of merits on a comprehensive, company-wide basis. As for products that of considering the effects of reductions in CO2 emissions from many aspects, not just in terms of investment contribute to energy savings, our products, including wiring materials used in LED lighting and other applications, profitability. I look forward to seeing the progress in your characteristic approach of generating considerable have been recognized for their high efficiency, and have become more widespread during FY2013. Also, our environmental benefit through your products. positive electrode material for secondary batteries is being used in new electric vehicles, and sales are growing. In your view, what does society require in regard to environmental preservation? Response to Stakeholder Comments You have covered the major issues concerning environmental preservation as viewed on a company and group While I agree that environmental impact assessments of the entire material cycle are important, since we are an basis. Besides the initiatives in your respective mineral resources, smelting and refining, and materials businesses, I upstream business, it is quite difficult to conduct such assessments. As for our scope for reducing CO2 Keisuke Takegahara think there will be a growing call for you to demonstrate the outcomes SMM provides to society from a more emissions further, we are studying the possibility of conducting assessments using a simplified method based Takashi Sugiura General Manager, comprehensive perspective of the whole material cycle. I would like to see you present to society a broader form of on coefficients for each product application. We are also considering utilizing renewable energy in collaboration Chairman, Environmental Preservation Subcommittee; Environmental Initiative & Corporate Executive Officer; CSR Executive Officer; Social Responsibility-Support Dept., your Vision for 2020 that also includes upstream and downstream effects. with other companies. In order to contribute to the promotion of energy conservation in society as a whole, we General Manager, Safety & Environment Control Dept. Development Bank of Japan Inc. are exploring various possibilities that can make use of our energy-saving technologies.

21 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 22 Environmental Preservation Initiatives in Environmental Preservation

the level of environmental management. respective divisions. advanced material products are ultimately exported to the Business Site Organizations In FY2013, in addition to overseas workplaces, it was decided to In the course for qualifying as an internal environmental auditor, European Union (EU), contained within customers’ products via Every year, the President sets targets (SMM Group environmental also include those business sites judged to have only a small participants who pass a final examination after completing the the value chain. Since the RoHS Directive3 and REACH targets) in consideration of the environmental risks faced by the environmental risk in the group of sites to visit for environmental two-day curriculum become certified auditors. In FY2013, the Regulation4 have already come into force in the EU with an aim of SMM Group. In response, business sites and Group companies of care once every three years. As a consequence, checks were course was held nine times, providing training to a total of 127 safeguarding human health and the environment, our products each business division integrate these targets into their undertaken at 27 business sites. participants. This brings the cumulative total number of trained also comply with these. environmental management systems established according to the As a new initiative from FY2013, it was decided to also make internal environmental auditors to 2,422. Under the RoHS Directive, electrical and electronic devices ISO 14001 standard. close-call events subject to reporting to the Safety & Environment A professional development course was launched in FY2010, marketed in the EU are effectively prohibited from containing the In FY2013, the following themes were indicated in the President’s Control Department, when it exceeds voluntary standards and/or designed for already qualified internal environmental auditors. This following six substances in any smallest part that could be targets: has an effect on operations. In the event of an incident, in addition is a one-day curriculum aimed at developing key persons in separated from the device—lead, mercury, cadmium, chromium ● Environmental risk reduction to providing advice after checking the causes and the response environmental management. In total, 84 people have completed (VI), polybrominated biphenyl (PBB) and polybrominated diphenyl ● Environmental compliance taken, efforts were also made to prevent similar close-call events the course, but in FY2013, the course was only run once and there ethers (PBDE). Two examples of how we have worked to comply ● Biodiversity preservation from occurring, such as by alerting each business site in the SMM were only nine participants. Increasing the number of participants with the RoHS Directive are our solder products and one of our Group where necessary and requiring them to check and report is a challenge. core products, pastes that use resistive glass. We developed (environmental impact reduction, comprehensive water back on their management situation, and by encouraging lead-free products, and have successfully migrated from the management, environmental management based on corrective action to be taken if factors were potentially present conventional products. international standards) Management of Chemical Substances similar to those that caused the incident. As indicated by the expression “no data, no market,” the REACH Given these themes, each business site set targets in view of Given the countless situations in which chemicals are handled in Regulation uses a system of registration. For some products, the their own environmental risks, before formulating plans. They then the SMM Group, all business sites have their own system for SMM Group attaches great importance to distribution in the EU, regularly checked their progress against the plans, and while Environmental Education managing chemical substances within their environmental and we are gradually getting these products registered by an “only adding revisions where necessary, sought to raise the level of their The Safety & Environment Control Department seizes every management system, which is operated under the direction of the representative” in order to ensure a stable supply without having to environmental preservation. available opportunity to provide environmental education, such as relevant division. For example, when a business site intends to use rely on registration by importers in the EU. In the Niihama District, where the SMM Group’s largest at the time of employment or promotion, when major revisions are a new chemical, it conducts a preliminary study including on production bases are located, the Safety & Environment Control made to laws, and when providing regular education to persons in hazard statements, laws and regulations and other applicable 1. SDS (Safety Data Sheet): A document listing information on a chemical, including Center (Besshi-Niihama District Division) provides guidance to the chemical substance, the product name, the supplier, hazards, safety charge of chemical substances at each division. The department information, before deciding in a meeting at the business site precautions and emergency procedures. business sites located within the district on their initiatives for also encourages employees to acquire official environment-related whether to adopt the chemical. The relevant business division and 2. GHS (Globally Harmonized System of Classification and Labeling of Chemicals): A environmental management. The center also provides support for qualifications, such as those for a pollution control manager, in a the Safety & Environment Control Department provide the business system for classifying chemical hazards according to type and degree and in group business sites located within the local region, such as by accordance with globally unified rules, whereby the hazards are communicated systematic manner while also taking their future careers into site with preliminary advice and confirmation (see Fig. 1). by displaying labels or providing SDSs. regularly holding meetings for the exchange of information. account. Furthermore, regardless of whether there are legal obligations, 3. RoHS Directive: The Restriction of Hazardous Substances Directive. 4. REACH Regulation: The Regulation on Registration, Evaluation, Authorisation and Furthermore, every year, the heads of every division that information on the safe handling of the chemical is communicated On-site Introductory Education Restriction of Chemicals. exercises control over business sites, inspect those business sites for all chemicals that are transferred or provided to customers or to Introductory education is provided at business sites to raise (including Group companies) to check whether environmental other business sites within the SMM Group by attaching an SDS1 awareness among new recruits, helping them to realize the management is being implemented appropriately. In the Materials that conforms to GHS2. Issues and Targets importance of environmental preservation and to recognize the Division, the Safety & Environment Control Department has been Semiconductor materials and advanced materials produced by No major spills or environmental infringements (against direct influence that their day-to-day tasks have on environmental established to provide the business sites under its control with the SMM Group, such as those used in products with low international treaties, covenants, laws or ordinances) occurred matters. support and guidance on environmental management. environmental impact, are incorporated by our customers into during FY2013. After placement in their respective workplaces, employees As for environmental management systems which serve as the electrical and electronic products and circulated widely to However, close-call environmental incidents are still occurring, undergo systematic education programs that are determined basis for environmental preservation activities, based on the domestic and foreign markets. Therefore, as part of our value such as on-site leaks of chemical substances, and the current according to the education and training needs of each workplace. Corporate Reform Plan announced in April 2000, the Group’s chain activities, we require information on the chemical substances management situation still has many issues needing improvement. Programs might include basic rules on disposing trash, the basic policy is to acquire ISO 14001 certification. Accordingly, contained in the raw materials we use, and we manage the By ensuring that business sites follow a cycle of PDCA for their hazardous properties of the chemical substances handled in Head Office, branches and all production bases and sites chemical substances contained in our products. respective environmental management systems, they will continue practice, work procedures for preventing those chemical responsible for closed and suspended mines in the SMM Group When developing a new material, we strive to develop a material to raise the level of their respective activities for environmental risk substances from having an impact on the environment, have acquired certification. In addition, any new production bases that can be used by our customers with peace of mind, by taking management, environmental compliance and biodiversity emergency procedures in an environmental accident scenario, as are also required to acquire certification as quickly as possible. In into account the hazardous properties of the substances preservation. In addition, related divisions, the Safety & well as each workplace’s activities for environmental preservation FY2014, we plan to acquire certification for the Pogo Mine in contained in our products, and by undertaking a series of reviews Environment Control Department and the Safety & Environment and the roles of those activities. Practical emergency drills are also Alaska. about various development topics, such as the regulations in Control Center (Besshi-Niihama District Division) will also continue run regularly. Japan and overseas that apply to the final product, and the initiatives providing support and guidance for improving the level Support for Business Sites Environmental e-learning environmental impact throughout the manufacturing process. of environmental preservation activities at business sites. Some of the SMM Group’s semiconductor material and The SMM Group handles large amounts of chemical substances In the second half of FY2008, an e-learning course on Japan’s during the manufacturing of products, particularly in smelting and main environmental laws was introduced with the objective of refining operations, and for that reason some business sites bear raising levels of compliance. Since then, the course has been updated to reflect amendments of the law, ensuring that it can be considerable environmental risk. Environmental care activities Business site involving visits to these sites to check up on initiatives for lowering used for learning, education and confirming regulations. In ■ Fig. 1 Management Framework for Adopting New Chemicals the risk of environmental accidents have been carried out since FY2013, about 70 newly appointed internal environmental auditors and others completed the course. Site proposing FY2008. Consult, confirm, etc. Purchase/production plan As part of these environmental care activities, the Safety & The main focus of this e-learning course is for participants to Business division Environment Control Department performs detailed checks of understand the key legal obligations relevant to the SMM Group’s Survey of applicable laws/regulations, management and on-site conditions, and identifies issues and businesses. In FY2013, a new e-learning course was established Report via hazard information and substance identification recommendations. These checks are conducted based on with a focus on understanding the underlying spirit of the law and Monthly Report on Health, about the best effort obligation. In FY2014, participation in this Safety and the Environment checklists to see whether there are any outstanding issues relating EMS meetings to, for example, the environmental management organization for course will be widely promoted, especially to internal Consult, confirm, etc. · Discuss appropriateness of purchasing/producing the the prevention of pollution, the procedures for managing chemical environmental auditors and to managers and supervisors involved in environmental management. substance substances and the operation of those procedures, environmental Review regulatory and hazard information, discuss results compliance including the legal obligation to use best efforts, and Internal Environmental Audit Seminars of chemical identification, exposure prevention and performance for biodiversity preservation. The findings are The Safety & Environment Control Department provides in-house response measures, response to regulatory requirements, Safety & compiled into a report in order to share any issues with the site education programs for training internal auditors, who play a occupational health and safety measures, etc. Environment · Approve/reject plan representatives and heads of related divisions. The business site central role in environmental management activities, taking Control Dept. considers countermeasures, and links them to improvements in responsibility, for example, for performing internal audits of their Contact Health and safety committee

23 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 24 Environmental Preservation Initiatives in Environmental Preservation the level of environmental management. respective divisions. advanced material products are ultimately exported to the Business Site Organizations In FY2013, in addition to overseas workplaces, it was decided to In the course for qualifying as an internal environmental auditor, European Union (EU), contained within customers’ products via Every year, the President sets targets (SMM Group environmental also include those business sites judged to have only a small participants who pass a final examination after completing the the value chain. Since the RoHS Directive3 and REACH targets) in consideration of the environmental risks faced by the environmental risk in the group of sites to visit for environmental two-day curriculum become certified auditors. In FY2013, the Regulation4 have already come into force in the EU with an aim of SMM Group. In response, business sites and Group companies of care once every three years. As a consequence, checks were course was held nine times, providing training to a total of 127 safeguarding human health and the environment, our products each business division integrate these targets into their undertaken at 27 business sites. participants. This brings the cumulative total number of trained also comply with these. environmental management systems established according to the As a new initiative from FY2013, it was decided to also make internal environmental auditors to 2,422. Under the RoHS Directive, electrical and electronic devices ISO 14001 standard. close-call events subject to reporting to the Safety & Environment A professional development course was launched in FY2010, marketed in the EU are effectively prohibited from containing the In FY2013, the following themes were indicated in the President’s Control Department, when it exceeds voluntary standards and/or designed for already qualified internal environmental auditors. This following six substances in any smallest part that could be targets: has an effect on operations. In the event of an incident, in addition is a one-day curriculum aimed at developing key persons in separated from the device—lead, mercury, cadmium, chromium ● Environmental risk reduction to providing advice after checking the causes and the response environmental management. In total, 84 people have completed (VI), polybrominated biphenyl (PBB) and polybrominated diphenyl ● Environmental compliance taken, efforts were also made to prevent similar close-call events the course, but in FY2013, the course was only run once and there ethers (PBDE). Two examples of how we have worked to comply ● Biodiversity preservation from occurring, such as by alerting each business site in the SMM were only nine participants. Increasing the number of participants with the RoHS Directive are our solder products and one of our Group where necessary and requiring them to check and report is a challenge. core products, pastes that use resistive glass. We developed (environmental impact reduction, comprehensive water back on their management situation, and by encouraging lead-free products, and have successfully migrated from the management, environmental management based on corrective action to be taken if factors were potentially present conventional products. international standards) Management of Chemical Substances similar to those that caused the incident. As indicated by the expression “no data, no market,” the REACH Given these themes, each business site set targets in view of Given the countless situations in which chemicals are handled in Regulation uses a system of registration. For some products, the their own environmental risks, before formulating plans. They then the SMM Group, all business sites have their own system for SMM Group attaches great importance to distribution in the EU, regularly checked their progress against the plans, and while Environmental Education managing chemical substances within their environmental and we are gradually getting these products registered by an “only adding revisions where necessary, sought to raise the level of their The Safety & Environment Control Department seizes every management system, which is operated under the direction of the representative” in order to ensure a stable supply without having to environmental preservation. available opportunity to provide environmental education, such as relevant division. For example, when a business site intends to use rely on registration by importers in the EU. In the Niihama District, where the SMM Group’s largest at the time of employment or promotion, when major revisions are a new chemical, it conducts a preliminary study including on production bases are located, the Safety & Environment Control made to laws, and when providing regular education to persons in hazard statements, laws and regulations and other applicable 1. SDS (Safety Data Sheet): A document listing information on a chemical, including Center (Besshi-Niihama District Division) provides guidance to the chemical substance, the product name, the supplier, hazards, safety charge of chemical substances at each division. The department information, before deciding in a meeting at the business site precautions and emergency procedures. business sites located within the district on their initiatives for also encourages employees to acquire official environment-related whether to adopt the chemical. The relevant business division and 2. GHS (Globally Harmonized System of Classification and Labeling of Chemicals): A environmental management. The center also provides support for qualifications, such as those for a pollution control manager, in a the Safety & Environment Control Department provide the business system for classifying chemical hazards according to type and degree and in group business sites located within the local region, such as by accordance with globally unified rules, whereby the hazards are communicated systematic manner while also taking their future careers into site with preliminary advice and confirmation (see Fig. 1). by displaying labels or providing SDSs. regularly holding meetings for the exchange of information. account. Furthermore, regardless of whether there are legal obligations, 3. RoHS Directive: The Restriction of Hazardous Substances Directive. 4. REACH Regulation: The Regulation on Registration, Evaluation, Authorisation and Furthermore, every year, the heads of every division that information on the safe handling of the chemical is communicated On-site Introductory Education Restriction of Chemicals. exercises control over business sites, inspect those business sites for all chemicals that are transferred or provided to customers or to Introductory education is provided at business sites to raise (including Group companies) to check whether environmental other business sites within the SMM Group by attaching an SDS1 awareness among new recruits, helping them to realize the management is being implemented appropriately. In the Materials that conforms to GHS2. Issues and Targets importance of environmental preservation and to recognize the Division, the Safety & Environment Control Department has been Semiconductor materials and advanced materials produced by No major spills or environmental infringements (against direct influence that their day-to-day tasks have on environmental established to provide the business sites under its control with the SMM Group, such as those used in products with low international treaties, covenants, laws or ordinances) occurred matters. support and guidance on environmental management. environmental impact, are incorporated by our customers into during FY2013. After placement in their respective workplaces, employees As for environmental management systems which serve as the electrical and electronic products and circulated widely to However, close-call environmental incidents are still occurring, undergo systematic education programs that are determined basis for environmental preservation activities, based on the domestic and foreign markets. Therefore, as part of our value such as on-site leaks of chemical substances, and the current according to the education and training needs of each workplace. Corporate Reform Plan announced in April 2000, the Group’s chain activities, we require information on the chemical substances management situation still has many issues needing improvement. Programs might include basic rules on disposing trash, the basic policy is to acquire ISO 14001 certification. Accordingly, contained in the raw materials we use, and we manage the By ensuring that business sites follow a cycle of PDCA for their hazardous properties of the chemical substances handled in Head Office, branches and all production bases and sites chemical substances contained in our products. respective environmental management systems, they will continue practice, work procedures for preventing those chemical responsible for closed and suspended mines in the SMM Group When developing a new material, we strive to develop a material to raise the level of their respective activities for environmental risk substances from having an impact on the environment, have acquired certification. In addition, any new production bases that can be used by our customers with peace of mind, by taking management, environmental compliance and biodiversity emergency procedures in an environmental accident scenario, as are also required to acquire certification as quickly as possible. In into account the hazardous properties of the substances preservation. In addition, related divisions, the Safety & well as each workplace’s activities for environmental preservation FY2014, we plan to acquire certification for the Pogo Mine in contained in our products, and by undertaking a series of reviews Environment Control Department and the Safety & Environment and the roles of those activities. Practical emergency drills are also Alaska. about various development topics, such as the regulations in Control Center (Besshi-Niihama District Division) will also continue run regularly. Japan and overseas that apply to the final product, and the initiatives providing support and guidance for improving the level Support for Business Sites Environmental e-learning environmental impact throughout the manufacturing process. of environmental preservation activities at business sites. Some of the SMM Group’s semiconductor material and The SMM Group handles large amounts of chemical substances In the second half of FY2008, an e-learning course on Japan’s during the manufacturing of products, particularly in smelting and main environmental laws was introduced with the objective of refining operations, and for that reason some business sites bear raising levels of compliance. Since then, the course has been updated to reflect amendments of the law, ensuring that it can be considerable environmental risk. Environmental care activities Business site involving visits to these sites to check up on initiatives for lowering used for learning, education and confirming regulations. In ■ Fig. 1 Management Framework for Adopting New Chemicals the risk of environmental accidents have been carried out since FY2013, about 70 newly appointed internal environmental auditors and others completed the course. Site proposing FY2008. Consult, confirm, etc. Purchase/production plan As part of these environmental care activities, the Safety & The main focus of this e-learning course is for participants to Business division Environment Control Department performs detailed checks of understand the key legal obligations relevant to the SMM Group’s Survey of applicable laws/regulations, management and on-site conditions, and identifies issues and businesses. In FY2013, a new e-learning course was established Report via hazard information and substance identification recommendations. These checks are conducted based on with a focus on understanding the underlying spirit of the law and Monthly Report on Health, about the best effort obligation. In FY2014, participation in this Safety and the Environment checklists to see whether there are any outstanding issues relating EMS meetings to, for example, the environmental management organization for course will be widely promoted, especially to internal Consult, confirm, etc. · Discuss appropriateness of purchasing/producing the the prevention of pollution, the procedures for managing chemical environmental auditors and to managers and supervisors involved in environmental management. substance substances and the operation of those procedures, environmental Review regulatory and hazard information, discuss results compliance including the legal obligation to use best efforts, and Internal Environmental Audit Seminars of chemical identification, exposure prevention and performance for biodiversity preservation. The findings are The Safety & Environment Control Department provides in-house response measures, response to regulatory requirements, Safety & compiled into a report in order to share any issues with the site education programs for training internal auditors, who play a occupational health and safety measures, etc. Environment · Approve/reject plan representatives and heads of related divisions. The business site central role in environmental management activities, taking Control Dept. considers countermeasures, and links them to improvements in responsibility, for example, for performing internal audits of their Contact Health and safety committee

23 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 24 Environmental Preservation Initiatives in Global Warming Control (Indirect Effects of Biodiversity) ■ areas of operation within the mine, and it managed to reduce its Unit Energy and CO2 Emissions Index* Basic Approach FY2013 Results peak power usage by 12.5%. Boundary: Smelting/Refining Business in Japan SMM views climate change due to global warming as a threat to Currently, key tunnels and shafts stretch more than 100 km in In the Japanese smelting and refining business in FY2013, there Unit energy consumption index

the planet’s biodiversity and a serious risk to SMM Group business length, and in order to develop deeper levels of ore, work has was a year-on-year increase of 4.5% in unit energy consumption (Unit energy and CO2 emissions index) (Reference) Unit CO2 emissions index activities. SMM aims to become “a company that meets commenced on digging access tunnels so that a new drainage over FY2012. The main reason for the increase was because we international anti-global warming standards by using advanced facility can be constructed 80 meters below sea level. As a produced a greater percentage of products with a high unit 1.00 1.00 technologies,” as stated in our Vision for 2020. The company is consequence of widening and deepening these tunnels though, energy consumption. 1.00 focused on reducing CO2 emissions generated by business the energy needed for drainage and environmental improvement There was also a reduction of about 12 kilotons in activities. has tended to increase. energy-derived CO2 emissions in the Japanese smelting and Our main objective in FY2013 was to promote energy In FY2013, our efforts focused on improving the cold water refining business as a result of energy conservation activities. 0.95 conservation activities with the targets of reducing CO2 emissions circulation system used for local cooling inside the mine. Going However, taking into account the effects of worsening emission across the entire Group and 1% year-on-year reduction in unit forward, our efforts will focus on reducing the amount of energy factors by power suppliers (approximately 59 kilotons), overall 0.90 0.90 energy consumption, that put forward for environmental used in environmental improvements, with particular attention paid CO2 emissions went up by approximately 58 kilotons over FY2012. preservation, one of the Six Key CSR Areas. to optimizing (concentrating) the mining areas. We will move Unit CO2 emissions increased by 8.5% as a consequence of the We also put in place an energy management framework, ahead with plans that take into account a balance between work increase in unit energy consumption and the worsening emission 0.88 0.85 applicable to the entire Group, in line with CSR objectives and in environment, production output and energy conservation. factors by power suppliers. Overseas, despite increased 0.83 0.86 response to 2008 revisions to the Act on the Rational Use of production at CBNC, CO2 emissions decreased by 7 kilotons in 0.81 Energy, which oblige business operators to manage energy part due to restructuring the overseas materials business. 0.83 0.79 0.80 consumption. Energy management meetings and patrols of each In FY2014, we are aiming for an 18 kiloton reduction of CO2 0.80 0.82 business facility are being conducted mainly by the Technology emissions in smelting and refining and other businesses in Japan Division with the goal of stimulating energy conservation activities. by means of continued energy conservation activities and new 0.78 trials. 0.75 1990 2009 2010 2011 2012 2013 (FY) Initiative Examples CO2 emissions from transportation within Japan, which are indirect emissions, are being reduced through efforts to increase * Unit energy and CO2 emissions index February is designated by the government as Energy the use of ship transportation and improve load efficiency. The amount of energy consumed and CO2 emitted during the production of 1 ton of Conservation Month. Various events relating to energy product, assuming the FY1990 value to be 1 (including fuels used as reducing However, in FY2013, these CO2 emissions totaled 23 kilotons, an agents). conservation are held, including the presentation of the Energy increase of around 3 kilotons from FY2012. Two factors that led to Conservation Grand Prize and other awards for outstanding the increase were less ship transportation due to a drop in copper ■ CO2 Emissions energy-saving activities. In FY2013, Hishikari Mine received the production, and more automobile transportation due to a rise in Director-General of the Kyushu Bureau of Economy, Trade and the production of nickel and battery materials. FY1990 Boundary: Business in Japan Industry Award in the Kyushu region, and the Shimbashi Hishikari Mine FY2009-2013 Boundary: All businesses in Japan and Overseas ■ Smelting/refining business in Japan ■ Mineral resources business in Japan Sumitomo Building (Head Office) received the highest award from ■ Materials business in Japan ■ Other businesses in Japan the Kanto District Electricity Use Rationalization Committee in the (2) Shimbashi Sumitomo Building (Head Office) Issues and Targets ■ Smelting/refining business overseas ■ Mineral resources business overseas The Head Office building, which was constructed 32 years ago, (kt-CO2) ■ Materials business overseas Kanto region. has undergone a gradual renewal since 2008, with deteriorating SMM has introduced a full range of initiatives for cutting 3,000 greenhouse gas, primarily CO2, emissions generated by business (1) Hishikari Mine facilities being replaced with the latest energy conservation In 1997, the Hishikari Mine became Japan’s most productive gold facilities. The two absorption refrigeration systems installed in activities, but in order to bring about further benefits, we are going 2,698 mine (83.1 tons). In 2012, gold output reached 200 tons, and 2008 made a great contribution to summertime air conditioning to have to invest considerably in facility and process 2,618 improvements. Given that the rising of electricity costs and fuel currently, ore is mined at a rate equivalent to 7.0 tons of gold per power reduction after the Great East Japan Earthquake in 2011. 2,500 2,459 2,409 year (FY2013 actual yield). The Hishikari Mine aims to be “a clean In FY2011, we replaced the twin fluorescent tube lights used in prices has become more pronounced since FY2011, we will also 2,371 and bright underground operation” that gives top priority to safety, offices with energy-saving single lights with reflecting panels. continue to explore initiatives previously set aside as being factors and “a mine that is in harmony with the wonderful natural Other measures to save power included installing LED lighting in in increasing costs, such as the introduction of renewable energy environment and which is loved by the local community.” the underground parking lot. In recognition for these measures, and switching fuels. Given that thermal spring water measuring about 65ºC flows we received an award of excellence in FY2012 from the Kanto In the smelting and refining business, our energy requirements 2,000 within the veins of the ore, when mining the ore, the level of the District Electricity Use Rationalization Committee, Japan Electric will inevitably rise due to the degradation of ores, the raw material, thermal spring water needs to be lowered below the mining level. Association Kanto Branch. and the promotion of the use of recycled materials. Striking a To achieve this, water is pumped at an average rate of 9 m3/min, Along with the continued introduction of low-energy lighting, air balance between lessening environmental impact and securing from a drainage facility 50 meters below sea level to the pithead conditioned hot and cold water pumps and air handling inverters profit will therefore require great resourcefulness, accompanied by 1,500 located 265 meters above sea level. Furthermore, because inside were also installed in FY2012. In recognition for these measures, technological innovation, and not just an extension of initiatives the mine is high in temperature and humidity, ventilation and in FY2013, we received the highest award from the above advanced so far. The SMM Group accepts this challenge, aiming power for local cooling are needed to improve the work committee. to reduce unit energy consumption by 1% each year. 1,186 environment. The drainage facility (about 35%) and the As a result of the FY2012 measures, in FY2013, we reduced our In view of the changing power situation after the Great East Japan Earthquake, Keidanren (Japan Business Federation) environmental improvement equipment (about 50%) account for energy consumption by 29.0% from FY2012, and we also reduced 1,000 published in January 2013 a revised version of the “Commitment the majority of power consumption. Therefore, the mine has our CO2 emissions by 398 tons. adopted a basic policy of “improving the work environment and to a Low Carbon Society,” its climate change policy for 2013 and striving to conserve energy; using wisdom and ingenuity to beyond.” The Japan Mining Industry Association, a non-ferrous achieve targets without any waste or unreasonable burden.” metals industrial organization, used this new policy as the basis Based on this policy, the mine has promoted initiatives with an for announcing the industry target of “a 15% reduction in unit CO2 500 emphasis on the inclusive participation of all employees. emissions by FY2020 in comparison to FY1990.” SMM has already The award covered the three-year period from FY2010 to achieved this target in the Japanese smelting and refining FY2012, and during this time, the mine improved its unit energy business, but we are working towards the goal of reducing unit consumption by 9.7%. It did this through careful operational energy consumption by 1% each year, as described above. 0 management of its key facilities, including the introduction of 1990 2009 2010 2011 2012 2013 (FY) inverters for the drainage facility and other equipment in the mine * Emissions in Japan and overseas which do not relate to electric power are and the active installation of LED lighting. The mine also Certificate of highest award for businesses calculated using emission factors conforming to the Japanese Act on Promotion of endeavored to use less electricity, primarily by concentrating its with model energy management Global Warming Countermeasures. These include non-energy-derived CO2 emissions (253 kt-CO2) that are outside the scope of the above act.

CO2 emissions derived from purchased electricity in Japan are calculated using the emission factors of the electric power suppliers. Emission factors for overseas are based on International Energy Agency (IEA) data.

25 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 26 Environmental Preservation Initiatives in Global Warming Control (Indirect Effects of Biodiversity) ■ areas of operation within the mine, and it managed to reduce its Unit Energy and CO2 Emissions Index* Basic Approach FY2013 Results peak power usage by 12.5%. Boundary: Smelting/Refining Business in Japan SMM views climate change due to global warming as a threat to Currently, key tunnels and shafts stretch more than 100 km in In the Japanese smelting and refining business in FY2013, there Unit energy consumption index the planet’s biodiversity and a serious risk to SMM Group business length, and in order to develop deeper levels of ore, work has was a year-on-year increase of 4.5% in unit energy consumption (Unit energy and CO2 emissions index) (Reference) Unit CO2 emissions index activities. SMM aims to become “a company that meets commenced on digging access tunnels so that a new drainage over FY2012. The main reason for the increase was because we international anti-global warming standards by using advanced facility can be constructed 80 meters below sea level. As a produced a greater percentage of products with a high unit 1.00 1.00 technologies,” as stated in our Vision for 2020. The company is consequence of widening and deepening these tunnels though, energy consumption. 1.00 focused on reducing CO2 emissions generated by business the energy needed for drainage and environmental improvement There was also a reduction of about 12 kilotons in activities. has tended to increase. energy-derived CO2 emissions in the Japanese smelting and Our main objective in FY2013 was to promote energy In FY2013, our efforts focused on improving the cold water refining business as a result of energy conservation activities. 0.95 conservation activities with the targets of reducing CO2 emissions circulation system used for local cooling inside the mine. Going However, taking into account the effects of worsening emission across the entire Group and 1% year-on-year reduction in unit forward, our efforts will focus on reducing the amount of energy factors by power suppliers (approximately 59 kilotons), overall 0.90 0.90 energy consumption, that put forward for environmental used in environmental improvements, with particular attention paid CO2 emissions went up by approximately 58 kilotons over FY2012. preservation, one of the Six Key CSR Areas. to optimizing (concentrating) the mining areas. We will move Unit CO2 emissions increased by 8.5% as a consequence of the We also put in place an energy management framework, ahead with plans that take into account a balance between work increase in unit energy consumption and the worsening emission 0.88 0.85 applicable to the entire Group, in line with CSR objectives and in environment, production output and energy conservation. factors by power suppliers. Overseas, despite increased 0.83 0.86 response to 2008 revisions to the Act on the Rational Use of production at CBNC, CO2 emissions decreased by 7 kilotons in 0.81 Energy, which oblige business operators to manage energy part due to restructuring the overseas materials business. 0.83 0.79 0.80 consumption. Energy management meetings and patrols of each In FY2014, we are aiming for an 18 kiloton reduction of CO2 0.80 0.82 business facility are being conducted mainly by the Technology emissions in smelting and refining and other businesses in Japan Division with the goal of stimulating energy conservation activities. by means of continued energy conservation activities and new 0.78 trials. 0.75 1990 2009 2010 2011 2012 2013 (FY) Initiative Examples CO2 emissions from transportation within Japan, which are indirect emissions, are being reduced through efforts to increase * Unit energy and CO2 emissions index February is designated by the government as Energy the use of ship transportation and improve load efficiency. The amount of energy consumed and CO2 emitted during the production of 1 ton of Conservation Month. Various events relating to energy product, assuming the FY1990 value to be 1 (including fuels used as reducing However, in FY2013, these CO2 emissions totaled 23 kilotons, an agents). conservation are held, including the presentation of the Energy increase of around 3 kilotons from FY2012. Two factors that led to Conservation Grand Prize and other awards for outstanding the increase were less ship transportation due to a drop in copper ■ CO2 Emissions energy-saving activities. In FY2013, Hishikari Mine received the production, and more automobile transportation due to a rise in Director-General of the Kyushu Bureau of Economy, Trade and the production of nickel and battery materials. FY1990 Boundary: Business in Japan Industry Award in the Kyushu region, and the Shimbashi Hishikari Mine FY2009-2013 Boundary: All businesses in Japan and Overseas ■ Smelting/refining business in Japan ■ Mineral resources business in Japan Sumitomo Building (Head Office) received the highest award from ■ Materials business in Japan ■ Other businesses in Japan the Kanto District Electricity Use Rationalization Committee in the (2) Shimbashi Sumitomo Building (Head Office) Issues and Targets ■ Smelting/refining business overseas ■ Mineral resources business overseas The Head Office building, which was constructed 32 years ago, (kt-CO2) ■ Materials business overseas Kanto region. has undergone a gradual renewal since 2008, with deteriorating SMM has introduced a full range of initiatives for cutting 3,000 greenhouse gas, primarily CO2, emissions generated by business (1) Hishikari Mine facilities being replaced with the latest energy conservation In 1997, the Hishikari Mine became Japan’s most productive gold facilities. The two absorption refrigeration systems installed in activities, but in order to bring about further benefits, we are going 2,698 mine (83.1 tons). In 2012, gold output reached 200 tons, and 2008 made a great contribution to summertime air conditioning to have to invest considerably in facility and process 2,618 improvements. Given that the rising of electricity costs and fuel currently, ore is mined at a rate equivalent to 7.0 tons of gold per power reduction after the Great East Japan Earthquake in 2011. 2,500 2,459 2,409 year (FY2013 actual yield). The Hishikari Mine aims to be “a clean In FY2011, we replaced the twin fluorescent tube lights used in prices has become more pronounced since FY2011, we will also 2,371 and bright underground operation” that gives top priority to safety, offices with energy-saving single lights with reflecting panels. continue to explore initiatives previously set aside as being factors and “a mine that is in harmony with the wonderful natural Other measures to save power included installing LED lighting in in increasing costs, such as the introduction of renewable energy environment and which is loved by the local community.” the underground parking lot. In recognition for these measures, and switching fuels. Given that thermal spring water measuring about 65ºC flows we received an award of excellence in FY2012 from the Kanto In the smelting and refining business, our energy requirements 2,000 within the veins of the ore, when mining the ore, the level of the District Electricity Use Rationalization Committee, Japan Electric will inevitably rise due to the degradation of ores, the raw material, thermal spring water needs to be lowered below the mining level. Association Kanto Branch. and the promotion of the use of recycled materials. Striking a To achieve this, water is pumped at an average rate of 9 m3/min, Along with the continued introduction of low-energy lighting, air balance between lessening environmental impact and securing from a drainage facility 50 meters below sea level to the pithead conditioned hot and cold water pumps and air handling inverters profit will therefore require great resourcefulness, accompanied by 1,500 located 265 meters above sea level. Furthermore, because inside were also installed in FY2012. In recognition for these measures, technological innovation, and not just an extension of initiatives the mine is high in temperature and humidity, ventilation and in FY2013, we received the highest award from the above advanced so far. The SMM Group accepts this challenge, aiming power for local cooling are needed to improve the work committee. to reduce unit energy consumption by 1% each year. 1,186 environment. The drainage facility (about 35%) and the As a result of the FY2012 measures, in FY2013, we reduced our In view of the changing power situation after the Great East Japan Earthquake, Keidanren (Japan Business Federation) environmental improvement equipment (about 50%) account for energy consumption by 29.0% from FY2012, and we also reduced 1,000 published in January 2013 a revised version of the “Commitment the majority of power consumption. Therefore, the mine has our CO2 emissions by 398 tons. adopted a basic policy of “improving the work environment and to a Low Carbon Society,” its climate change policy for 2013 and striving to conserve energy; using wisdom and ingenuity to beyond.” The Japan Mining Industry Association, a non-ferrous achieve targets without any waste or unreasonable burden.” metals industrial organization, used this new policy as the basis Based on this policy, the mine has promoted initiatives with an for announcing the industry target of “a 15% reduction in unit CO2 500 emphasis on the inclusive participation of all employees. emissions by FY2020 in comparison to FY1990.” SMM has already The award covered the three-year period from FY2010 to achieved this target in the Japanese smelting and refining FY2012, and during this time, the mine improved its unit energy business, but we are working towards the goal of reducing unit consumption by 9.7%. It did this through careful operational energy consumption by 1% each year, as described above. 0 management of its key facilities, including the introduction of 1990 2009 2010 2011 2012 2013 (FY) inverters for the drainage facility and other equipment in the mine * Emissions in Japan and overseas which do not relate to electric power are and the active installation of LED lighting. The mine also Certificate of highest award for businesses calculated using emission factors conforming to the Japanese Act on Promotion of endeavored to use less electricity, primarily by concentrating its with model energy management Global Warming Countermeasures. These include non-energy-derived CO2 emissions (253 kt-CO2) that are outside the scope of the above act.

CO2 emissions derived from purchased electricity in Japan are calculated using the emission factors of the electric power suppliers. Emission factors for overseas are based on International Energy Agency (IEA) data.

25 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 26 Environmental Preservation Initiatives for Reducing Environmental Impact (Indirect Effects of Biodiversity)

4 5 ■ Fig. 2 Volume of NOx Emissions ■ Table 1 Volume of Waste (Hazardous /Non-hazardous ) Basic Approach (t) Water Usage (kt) 1,000 Given the characteristics of the SMM Group’s main businesses of Freshwater usage increased modestly as a result of increased Total Hazardous Non-hazardous 868 mining ore and smelting and refining non-ferrous metals, there is 830 production activity across the Group. Seawater usage declined Recycling 49 12 37 potential for our business to have a significant impact on 797 800 as a consequence of the decrease in the output of electrolytic Landfill 5,976 93 5,883 biodiversity. Potential direct impacts on biodiversity include the 714 copper at the Toyo Smelter & Refinery thanks to routine repairs Processing method Incineration 2 1 1 development of mines and the construction of new plants, while (see Fig. 5). 600 Volume reduction, etc. potential indirect impacts include the environmental impact The SMM Group has undertaken initiatives to reduce water 0 0 0 caused while our plants are operating. The Group’s initiatives for usage with a view to preserving biodiversity. Good results were Total 6,027 106 5,921 400 reducing environmental impact are not based on merely complying achieved at Nippon Ketjen, recycling seawater to reduce the Direct/ Direct disposal 5,884 with emission standards and effluent standards relating to volume of water taken from the sea by about 12%. Contracted Contracted disposal 143 hazardous substances. We also mitigate these indirect impacts on 200 4. In general, this depends upon definitions in the countries concerned. Since biodiversity. Japan does not have such laws or regulations, SMM applies the following 0 ■ definition: “Specially controlled industrial waste and waste delivered to 2010 2011 2012 2013 (FY) Fig. 5 Water Usage (Freshwater/Seawater) controlled landfill sites (excluding designated inert waste that should have (Million m3) been delivered to landfill sites for inert industrial waste, but was disposed of at Freshwater ■ 1 35 controlled landfill sites due to the distance limitation).” Fig. 3 Volume of Soot and Dust Emissions 32.1 Soot and Smoke Emissions 31.0 31.5 31.8 5. Waste other than hazardous waste. (t) 30 In FY2013, sulfur oxide (SOx) emissions decreased by about 7% 200 176 25 ■ Fig. 6 Breakdown of Industrial Waste (in Japan) by Type of Waste from FY2012. At the Toyo Smelter & Refinery, although the 165 decrease in production of electrolytic copper from FY2012 was 151 157 20 Other waste 6.2% about 8%, there was an even greater decrease in SOx emissions 150 15 of about 24%. This was due to having undertaken improvement Scrap metal 3.5% 10 works on the exhaust gas line for raw materials in February 2014, Sludge 3.7% 100 and to strengthening the management of facilities for removing 5 hazardous substances. A further reduction in emissions is Debris 7.0% 0 expected in FY2014 as the effects of the improvement works are 2010 2011 2012 2013 (FY) fully realized. At CBNC, although production increased by about 50 Total waste 13% from FY2012, SOx emissions decreased by about 11% due (Million m3) Seawater 132 kt to a degradation of the sulfur content in fuel. Nitrogen oxide (NOx) 200 176 emissions increased by about 5% from FY2012 for the SMM 0 2010 2011 2012 2013 (FY) 155 Group as a whole (see Fig. 1 and 2). 150 144 144 The SMM Group began calculating total soot and dust 1. FY2010 only covers operations in Japan. FY2011 onward includes Slag emissions for business sites in Japan from FY2010, and for CBNC operations in Japan and overseas. 79.6% from FY2011. Emissions increased by about 5% for the Group as 100 a whole (see Fig. 3). COD and BOD Pollutant Loads Particularly at plants with multiple dust collectors, in addition to 50 Many SMM Group sites face onto Japan’s Seto Inland Sea and are striving to enhance maintenance, given the need for dealing with ■ Fig. 7 Final Disposal Volumes6 of Industrial and subject to controls on the total amounts of chemical oxygen aging equipment, we have proceeded to systematically replace 0 Mining Waste in Japan demand (COD), nitrogen and phosphorus emissions under the Act 2010 2011 2012 2013 (FY) them. ■ ■ 7 on Special Measures Concerning Conservation of the Environment (kt) Industrial waste Mining waste 120 of the Seto Inland Sea. 103 Fig. 1–5 In FY2013, COD decreased by about 5% from FY2012, but BOD 98 100 5 97 ■ Toyo Smelter & Refinery ■ Niihama Nickel Refinery ■ Shisaka Smelting Total Emissions and Final Disposal of 3 increased. The Hishikari Mine accounts for a fair proportion of 4 ■ Harima Smelter ■ Hyuga Smelting ■ CBNC ■ All mining operations ■ All other operations these, and so we will work to improve the accuracy of Industrial and Mining Waste 81 80 6 measurements here (see Fig. 4). Table 1 summarizes the volumes of waste emitted from all

business sites in the SMM Group, including overseas sites, 60 according to the disposal or processing method, whether disposal ■ 98 95 93 Fig. 1 Volume of SOx Emissions ■ Fig. 4 COD and BOD2 Pollutant Loads or processing was performed directly or contracted, and how 40 75 (t) (t) much of the waste was hazardous and non-hazardous. 2,000 80 The total volume of industrial waste emitted (in Japan) was 132 1,743 20 COD 1,632 1,610 64 kilotons. Figure 6 shows a breakdown of the different types of 61 60 57 waste. Slag accounted for about 80% of the total. 1,500 1,387 54 0 The SMM Group has long been making efforts to reduce 2010 2011 2012 2013 (FY) industrial waste (in Japan) and the amount of wastewater 6. Includes waste destined for landfills and simple incineration. 1,000 40 precipitate (mining waste) from the mine-affiliated Toyo Smelter & 7. Mining waste in the form of wastewater sludge generated by mine-affiliated Toyo Smelter & Refinery that is landfilled within the business site. BOD Refinery that undergoes final disposal. In FY2013, 97 kilotons of waste underwent final disposal, a 500 20 decline of about 1.4 kilotons from FY2012. Iron clinker3 from 13 10 6 6 Shisaka Smelting and zinc slag from the Harima Smelter accounted for the majority of this. One major factor in the decline 0 0 2010 2011 2012 2013 (FY) 2010 2011 2012 2013 (FY) was a decrease in the volume of debris generated in the 2. COD (Chemical Oxygen Demand): Measured for emissions into seas, dismantling of facilities following completion of the switch to oxide including emissions into rivers flowing into enclosed seas. ore-only processing at the Harima Smelter (see Fig. 7). BOD (Biochemical Oxygen Demand): Measured for emissions into rivers, excluding emissions flowing into enclosed seas. 3. Iron clinker: The residue remaining during the processing of electric arc furnace dust after recovering zinc. That residue able to be sold is called “iron pellets,” and that included in final disposal is called “iron clinkers.”

27 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 28 Environmental Preservation Initiatives for Reducing Environmental Impact (Indirect Effects of Biodiversity)

4 5 ■ Fig. 2 Volume of NOx Emissions ■ Table 1 Volume of Waste (Hazardous /Non-hazardous ) Basic Approach (t) Water Usage (kt) 1,000 Given the characteristics of the SMM Group’s main businesses of Freshwater usage increased modestly as a result of increased Total Hazardous Non-hazardous 868 mining ore and smelting and refining non-ferrous metals, there is 830 production activity across the Group. Seawater usage declined Recycling 49 12 37 potential for our business to have a significant impact on 797 800 as a consequence of the decrease in the output of electrolytic Landfill 5,976 93 5,883 biodiversity. Potential direct impacts on biodiversity include the 714 copper at the Toyo Smelter & Refinery thanks to routine repairs Processing method Incineration 2 1 1 development of mines and the construction of new plants, while (see Fig. 5). 600 Volume reduction, etc. potential indirect impacts include the environmental impact The SMM Group has undertaken initiatives to reduce water 0 0 0 caused while our plants are operating. The Group’s initiatives for usage with a view to preserving biodiversity. Good results were Total 6,027 106 5,921 400 reducing environmental impact are not based on merely complying achieved at Nippon Ketjen, recycling seawater to reduce the Direct/ Direct disposal 5,884 with emission standards and effluent standards relating to volume of water taken from the sea by about 12%. Contracted Contracted disposal 143 hazardous substances. We also mitigate these indirect impacts on 200 4. In general, this depends upon definitions in the countries concerned. Since biodiversity. Japan does not have such laws or regulations, SMM applies the following 0 ■ definition: “Specially controlled industrial waste and waste delivered to 2010 2011 2012 2013 (FY) Fig. 5 Water Usage (Freshwater/Seawater) controlled landfill sites (excluding designated inert waste that should have (Million m3) been delivered to landfill sites for inert industrial waste, but was disposed of at Freshwater ■ 1 35 controlled landfill sites due to the distance limitation).” Fig. 3 Volume of Soot and Dust Emissions 32.1 Soot and Smoke Emissions 31.0 31.5 31.8 5. Waste other than hazardous waste. (t) 30 In FY2013, sulfur oxide (SOx) emissions decreased by about 7% 200 176 25 ■ Fig. 6 Breakdown of Industrial Waste (in Japan) by Type of Waste from FY2012. At the Toyo Smelter & Refinery, although the 165 decrease in production of electrolytic copper from FY2012 was 151 157 20 Other waste 6.2% about 8%, there was an even greater decrease in SOx emissions 150 15 of about 24%. This was due to having undertaken improvement Scrap metal 3.5% 10 works on the exhaust gas line for raw materials in February 2014, Sludge 3.7% 100 and to strengthening the management of facilities for removing 5 hazardous substances. A further reduction in emissions is Debris 7.0% 0 expected in FY2014 as the effects of the improvement works are 2010 2011 2012 2013 (FY) fully realized. At CBNC, although production increased by about 50 Total waste 13% from FY2012, SOx emissions decreased by about 11% due (Million m3) Seawater 132 kt to a degradation of the sulfur content in fuel. Nitrogen oxide (NOx) 200 176 emissions increased by about 5% from FY2012 for the SMM 0 2010 2011 2012 2013 (FY) 155 Group as a whole (see Fig. 1 and 2). 150 144 144 The SMM Group began calculating total soot and dust 1. FY2010 only covers operations in Japan. FY2011 onward includes Slag emissions for business sites in Japan from FY2010, and for CBNC operations in Japan and overseas. 79.6% from FY2011. Emissions increased by about 5% for the Group as 100 a whole (see Fig. 3). COD and BOD Pollutant Loads Particularly at plants with multiple dust collectors, in addition to 50 Many SMM Group sites face onto Japan’s Seto Inland Sea and are striving to enhance maintenance, given the need for dealing with ■ Fig. 7 Final Disposal Volumes6 of Industrial and subject to controls on the total amounts of chemical oxygen aging equipment, we have proceeded to systematically replace 0 Mining Waste in Japan demand (COD), nitrogen and phosphorus emissions under the Act 2010 2011 2012 2013 (FY) them. ■ ■ 7 on Special Measures Concerning Conservation of the Environment (kt) Industrial waste Mining waste 120 of the Seto Inland Sea. 103 Fig. 1–5 In FY2013, COD decreased by about 5% from FY2012, but BOD 98 100 5 97 ■ Toyo Smelter & Refinery ■ Niihama Nickel Refinery ■ Shisaka Smelting Total Emissions and Final Disposal of 3 increased. The Hishikari Mine accounts for a fair proportion of 4 ■ Harima Smelter ■ Hyuga Smelting ■ CBNC ■ All mining operations ■ All other operations these, and so we will work to improve the accuracy of Industrial and Mining Waste 81 80 6 measurements here (see Fig. 4). Table 1 summarizes the volumes of waste emitted from all

business sites in the SMM Group, including overseas sites, 60 according to the disposal or processing method, whether disposal ■ 98 95 93 Fig. 1 Volume of SOx Emissions ■ Fig. 4 COD and BOD2 Pollutant Loads or processing was performed directly or contracted, and how 40 75 (t) (t) much of the waste was hazardous and non-hazardous. 2,000 80 The total volume of industrial waste emitted (in Japan) was 132 1,743 20 COD 1,632 1,610 64 kilotons. Figure 6 shows a breakdown of the different types of 61 60 57 waste. Slag accounted for about 80% of the total. 1,500 1,387 54 0 The SMM Group has long been making efforts to reduce 2010 2011 2012 2013 (FY) industrial waste (in Japan) and the amount of wastewater 6. Includes waste destined for landfills and simple incineration. 1,000 40 precipitate (mining waste) from the mine-affiliated Toyo Smelter & 7. Mining waste in the form of wastewater sludge generated by mine-affiliated Toyo Smelter & Refinery that is landfilled within the business site. BOD Refinery that undergoes final disposal. In FY2013, 97 kilotons of waste underwent final disposal, a 500 20 decline of about 1.4 kilotons from FY2012. Iron clinker3 from 13 10 6 6 Shisaka Smelting and zinc slag from the Harima Smelter accounted for the majority of this. One major factor in the decline 0 0 2010 2011 2012 2013 (FY) 2010 2011 2012 2013 (FY) was a decrease in the volume of debris generated in the 2. COD (Chemical Oxygen Demand): Measured for emissions into seas, dismantling of facilities following completion of the switch to oxide including emissions into rivers flowing into enclosed seas. ore-only processing at the Harima Smelter (see Fig. 7). BOD (Biochemical Oxygen Demand): Measured for emissions into rivers, excluding emissions flowing into enclosed seas. 3. Iron clinker: The residue remaining during the processing of electric arc furnace dust after recovering zinc. That residue able to be sold is called “iron pellets,” and that included in final disposal is called “iron clinkers.”

27 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 28 Environmental Preservation

Initiatives for Reducing Environmental Impact (Indirect Effects of Biodiversity)

■ SMM Group’s FY2013 PRTR Substance Release and ■ Fig. 1 Total Release and Transfer Volume ■ Fig. 5 Breakdown of Transfers Risk Management for Mining Waste FY2011 FY2012 FY2013 Transfer Volume (t) Transfers Releases (t) (t) 3,000 2,500 The SMM Group carries out appropriate management of mining Releases Transfers 2,831 123 2,613 waste generated by the mineral resources business, such as 111 Chemical 2,500 1,934 topsoil, spoil, tailings, and sludge. substance* 2,281 Soil 2,000 Water Waste Landfill 131 Sewerage Oxidization of rocks (spoil) containing sulfide minerals can Atmosphere 2,000 cause acidic water that contains sulfate ions or water containing Zinc compounds (water-soluble) 0.0 1.2 0.0 0.0 0.0 0.0 1,580 1,500 heavy metal ions, and therefore wastewater from mines is 2,708 2,502 Antimony and 1,500 126 0.0 0.0 0.0 0.4 0.0 1.2 properly processed in water treatment facilities before release. its compounds 2,150 The Pogo Mine further alleviates risk by surrounding all Ethylbenzene 0.1 0.0 0.0 0.0 0.0 0.2 1,000 1,000 mineralized spoil with dehydrated flotation tailings so as to 1,454 Ferric chloride 0.0 0.0 0.0 0.0 0.0 0.3 isolate it from the outside environment. Tailings containing 500 500 chemicals that are a high risk to the environment are stabilized Cadmium and 0.0 0.1 0.0 1.4 0.0 0.2 its compounds 270 by mixing them with cement for use as backfill, while all other 0 132 2010 2011 2012 2013 (FY) 100 66 tailings are stored outside the mine after undergoing Xylene 1.4 0.0 0.0 0.0 0.0 0.1 0 Manganese Lead Chromium and Nickel Other dehydration to reduce volume. Reducing the volume of the Silver and its water- and its chromium (III) compounds soluble compounds 0.0 0.0 0.0 0.0 0.0 0.5 ■ Fig. 2 Breakdown of Releases compounds compounds tailings reduces the area required for accumulation sites and (t) Landfill (SMM premises) Soil Water Atmosphere Chromium and alleviates risk related to the structural stability of sites. 140 chromium (III) 0.4 0.0 0.0 0.0 0.0 100 131 compounds 126 123 120 115 Chromium (VI) 0.0 0.0 0.0 0.0 0.0 0.4 105 23 111 compounds 23 20 Issues and Targets 100 22 Chemical Substance Releases and Transfers Cobalt and 0.0 0.0 0.0 0.0 0.0 7.8 its compounds In terms of smoke and soot emissions, we expect to reduce SOx 80 2053 2053 The following is an overview of FY2013 releases and transfers of emissions further by improving the exhaust gas facility at the Inorganic cyanide 0.2 0.0 0.0 0.0 0.0 0.0 chemical substances in Japan managed in line with the compounds 60 88 Toyo Smelter & Refinery. As for reducing the emissions of NOx, 84 74 Pollutant Release and Transfer Register (PRTR) system. Dichloromethane 13 0.0 0.0 0.0 0.0 0.0 91 soot and dust, in addition to endeavoring to operate the burners (methylene dichloride) 40 The SMM Group had 28 data-submitting sites (25 in FY2012) appropriately, we will continue to enhance the maintenance of Selenium and 20 0.8 and 37 substances requiring registration (39 in FY2012). 0.0 0.0 0.0 0.1 0.0 0.0 0.6 0.8 its compounds 0.9 the exhaust gas facility and proceed with planned The total release and transfer volume (releases + transfers) 14 16 18 14 Copper salts 0 developments and upgrades. 0.0 0.5 0.0 0.0 0.0 13.0 2010 2011 2012 2013 (FY) decreased by about 8% from FY2012 to 2,613 tons due to a (water-soluble) In terms of the withdrawal of water, in addition to continuing to decrease in transfers (Fig. 1). 1,2,4- 0.2 0.0 0.0 0.0 0.0 0.0 strive for a more refined water balance, we are committed to trimethylbenzene ■ Fig. 3 Breakdown of Releases into the Atmosphere The volume of chemical substances released into the reducing our water usage to reasonable levels. atmosphere remained about the same, while there were Toluene 2.4 0.0 0.0 0.0 0.0 2.8 (t) FY2011 FY2012 FY2013 14 The final disposal of industrial waste is still at a high level. As a decreases in releases into water and into landfills on SMM Naphthalene 0.0 0.0 0.0 0.0 0.0 6.5 13 way of reducing this, we will further improve the quality of the premises. The main factors were a decrease in releases due to 12 Lead 0.0 0.0 0.0 0.0 0.0 270 iron pellets, and in addition to striving to increase sales to steel a reduction in the concentration of boron in wastewater at the manufacturers that operate electric furnaces, we will explore Lead compounds 1.9 0.0 0.0 2.5 0.0 33 10 Hishikari Mine, and a decrease in arsenic and other substances new recycling options for iron pellets. in landfill associated with a decrease in the landfill of Nickel 0.0 0.0 0.0 0.0 0.0 1.9 8 To achieve further reductions in PRTR substance releases into wastewater precipitate at the Toyo Smelter & Refinery (Fig. 2, 3 Nickel compounds 1.2 0.5 0.0 1.1 0.0 66 the atmosphere, we will take all available steps, including and 4). 6 improvements to environmental facilities as well as more Arsenic and its The decrease in transfers was due to a degradation of the inorganic compounds 0.1 0.2 0.9 8.6 0.0 39 stringent operational management, based on medium- and 4 manganese contained in iron clinkers that undergo final 3.3 Hydrogen fluoride and 2.4 long-term targets. We will also continue to examine alternatives disposal as an industrial waste by-product, which was as a its water-soluble salts 0.0 8.6 0.0 0.0 0.0 0.0 1.9 2 1.4 to cleaning agents with volatile organic compounds (VOCs) for result of a degradation of the manganese contained in electric the cleaning of materials in electronics. Water-soluble salts 0.0 0.3 0.0 0.0 0.0 2.3 arc furnace dust which is used as a raw material at Shisaka of peroxydisulfuric acid 0 Dichloromethane Toluene Lead compounds Xylene Other Given the relatively large amount of chemical substances Smelting (Fig. 1 and 5). Boron compounds 0.0 62 0.0 0.0 0.0 2.1 contained in the iron pellet by-product produced at Shisaka At Taihei Metal Industry, the volume of dichloromethane Smelting, reducing their final disposal is a key factor in PRTR Formaldehyde 0.1 0.0 0.0 0.0 0.0 4.7 ■ Fig. 4 Breakdown of Releases into Water released into the atmosphere was reduced to zero as a result of (t) FY2011 FY2012 FY2013 substance transfers. replacing the dichloromethane, which had been used for Manganese and 80 its compounds 0.0 0.5 0.0 0.0 0.0 1,934 cleaning, with an alternative substance. At Ohkuchi Electronics, transfers were decreased considerably as a result of recycling Methylnaphthalene 0.8 0.0 0.0 0.0 0.0 5.9 70 62 toluene. Molybdenum and 60 its compounds 0.1 0.0 0.0 0.0 0.0 11 50 No ozone-depleting substances were released from (mg-TEQ) production processes of the SMM Group. 40 Dioxins 210 0.0 0.0 0.0 0.0 57

* Of 37 registered substances, only those with release/transfer amounts of 0.1 30 tons or above are shown. (Does not include dioxins.) 20

8.6 10 1.2 0.5 1.7 0 Boron Hydrogen Zinc Manganese Other compounds fluoride and its compounds and its water-soluble salts (water-soluble) compounds 29 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 30 Environmental Preservation

Initiatives for Reducing Environmental Impact (Indirect Effects of Biodiversity)

■ SMM Group’s FY2013 PRTR Substance Release and ■ Fig. 1 Total Release and Transfer Volume ■ Fig. 5 Breakdown of Transfers Risk Management for Mining Waste FY2011 FY2012 FY2013 Transfer Volume (t) Transfers Releases (t) (t) 3,000 2,500 The SMM Group carries out appropriate management of mining Releases Transfers 2,831 123 2,613 waste generated by the mineral resources business, such as 111 Chemical 2,500 1,934 topsoil, spoil, tailings, and sludge. substance* 2,281 Soil 2,000 Water Waste Landfill 131 Sewerage Oxidization of rocks (spoil) containing sulfide minerals can Atmosphere 2,000 cause acidic water that contains sulfate ions or water containing Zinc compounds (water-soluble) 0.0 1.2 0.0 0.0 0.0 0.0 1,580 1,500 heavy metal ions, and therefore wastewater from mines is 2,708 2,502 Antimony and 1,500 126 0.0 0.0 0.0 0.4 0.0 1.2 properly processed in water treatment facilities before release. its compounds 2,150 The Pogo Mine further alleviates risk by surrounding all Ethylbenzene 0.1 0.0 0.0 0.0 0.0 0.2 1,000 1,000 mineralized spoil with dehydrated flotation tailings so as to 1,454 Ferric chloride 0.0 0.0 0.0 0.0 0.0 0.3 isolate it from the outside environment. Tailings containing 500 500 chemicals that are a high risk to the environment are stabilized Cadmium and 0.0 0.1 0.0 1.4 0.0 0.2 its compounds 270 by mixing them with cement for use as backfill, while all other 0 132 2010 2011 2012 2013 (FY) 100 66 tailings are stored outside the mine after undergoing Xylene 1.4 0.0 0.0 0.0 0.0 0.1 0 Manganese Lead Chromium and Nickel Other dehydration to reduce volume. Reducing the volume of the Silver and its water- and its chromium (III) compounds soluble compounds 0.0 0.0 0.0 0.0 0.0 0.5 ■ Fig. 2 Breakdown of Releases compounds compounds tailings reduces the area required for accumulation sites and (t) Landfill (SMM premises) Soil Water Atmosphere Chromium and alleviates risk related to the structural stability of sites. 140 chromium (III) 0.4 0.0 0.0 0.0 0.0 100 131 compounds 126 123 120 115 Chromium (VI) 0.0 0.0 0.0 0.0 0.0 0.4 105 23 111 compounds 23 20 Issues and Targets 100 22 Chemical Substance Releases and Transfers Cobalt and 0.0 0.0 0.0 0.0 0.0 7.8 its compounds In terms of smoke and soot emissions, we expect to reduce SOx 80 2053 2053 The following is an overview of FY2013 releases and transfers of emissions further by improving the exhaust gas facility at the Inorganic cyanide 0.2 0.0 0.0 0.0 0.0 0.0 chemical substances in Japan managed in line with the compounds 60 88 Toyo Smelter & Refinery. As for reducing the emissions of NOx, 84 74 Pollutant Release and Transfer Register (PRTR) system. Dichloromethane 13 0.0 0.0 0.0 0.0 0.0 91 soot and dust, in addition to endeavoring to operate the burners (methylene dichloride) 40 The SMM Group had 28 data-submitting sites (25 in FY2012) appropriately, we will continue to enhance the maintenance of Selenium and 20 0.8 and 37 substances requiring registration (39 in FY2012). 0.0 0.0 0.0 0.1 0.0 0.0 0.6 0.8 its compounds 0.9 the exhaust gas facility and proceed with planned The total release and transfer volume (releases + transfers) 14 16 18 14 Copper salts 0 developments and upgrades. 0.0 0.5 0.0 0.0 0.0 13.0 2010 2011 2012 2013 (FY) decreased by about 8% from FY2012 to 2,613 tons due to a (water-soluble) In terms of the withdrawal of water, in addition to continuing to decrease in transfers (Fig. 1). 1,2,4- 0.2 0.0 0.0 0.0 0.0 0.0 strive for a more refined water balance, we are committed to trimethylbenzene ■ Fig. 3 Breakdown of Releases into the Atmosphere The volume of chemical substances released into the reducing our water usage to reasonable levels. atmosphere remained about the same, while there were Toluene 2.4 0.0 0.0 0.0 0.0 2.8 (t) FY2011 FY2012 FY2013 14 The final disposal of industrial waste is still at a high level. As a decreases in releases into water and into landfills on SMM Naphthalene 0.0 0.0 0.0 0.0 0.0 6.5 13 way of reducing this, we will further improve the quality of the premises. The main factors were a decrease in releases due to 12 Lead 0.0 0.0 0.0 0.0 0.0 270 iron pellets, and in addition to striving to increase sales to steel a reduction in the concentration of boron in wastewater at the manufacturers that operate electric furnaces, we will explore Lead compounds 1.9 0.0 0.0 2.5 0.0 33 10 Hishikari Mine, and a decrease in arsenic and other substances new recycling options for iron pellets. in landfill associated with a decrease in the landfill of Nickel 0.0 0.0 0.0 0.0 0.0 1.9 8 To achieve further reductions in PRTR substance releases into wastewater precipitate at the Toyo Smelter & Refinery (Fig. 2, 3 Nickel compounds 1.2 0.5 0.0 1.1 0.0 66 the atmosphere, we will take all available steps, including and 4). 6 improvements to environmental facilities as well as more Arsenic and its The decrease in transfers was due to a degradation of the inorganic compounds 0.1 0.2 0.9 8.6 0.0 39 stringent operational management, based on medium- and 4 manganese contained in iron clinkers that undergo final 3.3 Hydrogen fluoride and 2.4 long-term targets. We will also continue to examine alternatives disposal as an industrial waste by-product, which was as a its water-soluble salts 0.0 8.6 0.0 0.0 0.0 0.0 1.9 2 1.4 to cleaning agents with volatile organic compounds (VOCs) for result of a degradation of the manganese contained in electric the cleaning of materials in electronics. Water-soluble salts 0.0 0.3 0.0 0.0 0.0 2.3 arc furnace dust which is used as a raw material at Shisaka of peroxydisulfuric acid 0 Dichloromethane Toluene Lead compounds Xylene Other Given the relatively large amount of chemical substances Smelting (Fig. 1 and 5). Boron compounds 0.0 62 0.0 0.0 0.0 2.1 contained in the iron pellet by-product produced at Shisaka At Taihei Metal Industry, the volume of dichloromethane Smelting, reducing their final disposal is a key factor in PRTR Formaldehyde 0.1 0.0 0.0 0.0 0.0 4.7 ■ Fig. 4 Breakdown of Releases into Water released into the atmosphere was reduced to zero as a result of (t) FY2011 FY2012 FY2013 substance transfers. replacing the dichloromethane, which had been used for Manganese and 80 its compounds 0.0 0.5 0.0 0.0 0.0 1,934 cleaning, with an alternative substance. At Ohkuchi Electronics, transfers were decreased considerably as a result of recycling Methylnaphthalene 0.8 0.0 0.0 0.0 0.0 5.9 70 62 toluene. Molybdenum and 60 its compounds 0.1 0.0 0.0 0.0 0.0 11 50 No ozone-depleting substances were released from (mg-TEQ) production processes of the SMM Group. 40 Dioxins 210 0.0 0.0 0.0 0.0 57

* Of 37 registered substances, only those with release/transfer amounts of 0.1 30 tons or above are shown. (Does not include dioxins.) 20

8.6 10 1.2 0.5 1.7 0 Boron Hydrogen Zinc Manganese Other compounds fluoride and its compounds and its water-soluble salts (water-soluble) compounds 29 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 30 Environmental Preservation Initiatives in Creating Products Material Flows within Business Activity with Low Environmental Impact

The SMM Group ascertains the amount of resources and energy it consumes, as well as the Group’s overall environmental impact in than a gasoline-engine vehicle. quantitative terms, and carries out various activities to lower environmental impact. Here we summarize the inputs and outputs to and Expansion of Energy-related Materials Business As mentioned above, both hybrid vehicles and electric from operations in Japan and overseas during FY2013. The SMM Group sees its supplying of specialty materials for vehicles need to store energy in the form of electricity, and so products with a low environmental impact to be one of its they both have a battery for that purpose. Most hybrid vehicles 1 2 Raw Materials Recycled Materials contributions to a more sustainable society. today are fitted with a nickel-metal hydride (Ni-MH) battery. Gold and silver ore 1,097 kt Raw material for batteries 6 kt Copper scrap 86 kt By focusing on energy-related materials, the SMM Group aims Ni-MH batteries use nickel hydroxide as a positive electrode Copper concentrates 1,333 kt ALC raw material, Secondary zinc 53 kt to expand its business in the domains shown in the diagram material and what is called a hydrogen storage alloy, an alloy of incl. silica rock 214 kt Nickel oxide ore 4,846 kt Secondary precious metals 3 kt INPUT Raw material for below relating to the creating, storing, and saving of energy. nickel and lanthanum or other rare earth metal, as a negative Resources & Energy Nickel matte, etc. 43 kt metalworking 1 kt Scrap for metalworking 1 kt The Battery Materials Business Management Department of electrode material. SMM manufactures the nickel hydroxide that Hydrotreating catalyst Electric arc furnace dust 128 kt raw material 38 kt the Materials Division manufactures positive electrode materials goes into making the positive electrode. ALC waste 304 t for nickel metal hydride batteries used mainly in hybrid Because electric vehicles do not have an engine and vehicles, and positive electrode materials for lithium batteries therefore use only electricity to propel the vehicle, they are 3 Energy Materials Water used in electric vehicles and other products. equipped with a lithium-ion (Li-ion) battery, which can store Heavy fuel oils 59,871 kl (2,468,575 GJ) Silica sand (for copper smelting) Freshwater total 32,119 Ml Hybrid vehicles are vehicles that use regenerative brakes and more electricity than a Ni-MH battery. Li-ion batteries use a Coal/coke 423,716 t (11,212,392 GJ) 94 kt Industrial water 13,766 Ml other electric generation systems to turn mechanical energy chemical compound combining lithium oxide and one or more Wood pellets 3,994 t (70,694 GJ) Chemicals (lime-based) 753 kt Groundwater 10,037 Ml during coasting and deceleration into electrical energy. This metal oxides such as nickel and cobalt, as a positive electrode Diesel/gasoline/kerosene 24,891 kl (934,117 GJ) Chemicals (sodium-based) 52 kt Tap water 1,709 Ml electricity is stored in an on-board battery, and then used to material, and carbon, which can store lithium ions, as a LPG/LNG 8,224 t (417,785 GJ) Chemicals (magnesium-based) Surface water 6,608 Ml power an electric motor that assists the engine during starts negative electrode material. SMM manufactures the metal oxide City gas/natural gas 4,034 Ml (183,666 GJ) 12 kt Seawater 143,536 Ml and acceleration. Recapturing and storing previously wasted compounds that go into making the positive electrode. Purchased electricity 1,759,602 MWh (17,128,135 GJ) Cement etc. 74 kt energy for later use in this way has the effect of enhancing the The demand for environmentally friendly vehicles such as the Purchased steam 1,257 GJ (1,283GJ) vehicle’s energy efficiency. Hybrid vehicles that use this hybrid and electric vehicles discussed here is expected to grow technology have a fuel economy that is, on average, 20% better more and more as time passes. By supplying battery materials than their gasoline-only counterparts, and therefore emit for these vehicles, SMM believes it can make an important

proportionally less CO2 and have a commensurately smaller contribution to reducing the environmental impact of Products1 environmental impact from driving. automobiles.

Electrolytic copper 401 kt Crude zinc oxide 2 kt Electric vehicles, on the other hand, are vehicles that use a By capitalizing on technologies for synthesizing inorganic Gold 20 t Ferro-nickel 105 kt battery and motor in place of gasoline (or other fuel) and an materials based on the refining techniques we have cultivated OUTPUT Dore 12 t Battery materials 10 kt internal combustion engine. Unlike hybrid vehicles, which over the years, and by conducting more efficient production Products & Emissions Silver 191 t Sulfuric acid 821 kt generate their electricity inside the vehicle, electric vehicles that integrates the refining of nickel and cobalt from ore with the Electrolytic nickel 50 kt Slag 1,635 kt store in their on-board battery electricity that is generated final synthesis of battery materials, we also hope to contribute Nickel sulfate 9 kt Processed metal products 1 kt outside the vehicle. As a result, the environmental impact of to reductions in the environmental impact of battery material Electrolytic cobalt 3 kt Hydrotreating catalyst 8 kt driving an electric vehicle is about the same as the manufacturing. Prime western grade zinc 52 kt ALC (Siporex) 443 Ml environmental impact of a power plant. Generally speaking, Recycling-derived products ratio 3.53% electric vehicles emit less CO2—and therefore have a smaller environmental impact during use—for every kilometer driven Emissions into the Atmosphere Emissions into Water Waste (including Items of Value)

CO2 2,721 kt Total wastewater 174,791 Ml Total waste 6,027 kt ■ SMM Materials Relating to Energy Direct emissions4 1,594 kt Discharges into seas7 166,794 Ml Landfill on premises 5,884 kt Indirect emissions5 1,103 kt Discharges into rivers 6,591 Ml Emissions during transportation Underground seepage 103 Ml Breakdown of total waste SMM Products (Japan)6 23 kt Sewerage, etc. 1,302 Ml Spoil 695 kt Applications SOx 1,610 t COD (chemical oxygen demand) 54 t Flotation tailings 751 kt Markets NOx 868 t BOD (biochemical oxygen demand) 10 t Wastewater sludge from CBNC, etc. Domains Soot and dust 165 t Total phosphorus 1 t 4,434 kt Clean Energy Technologies Solar PRTR substances 22 t Total nitrogen 85 t Industrial waste (Japan) 132 kt energy (Creating, Storing and Saving of Energy) power PRTR substances Other 15 kt generation (discharged into public water areas) 74 t vehicles Fuel PRTR substances8 2,502 t Energy efficient Energy- Energy- PRTR substances (discharged into the soil Energy-efficient cells or in landfills within business premises) 15 t • Hybrid appliances/ Lighting efficient efficient vehicles housing/offices PCs/vehicles displays appliances Solar SOFCs • Electric cells vehicles Nickel • Air- Houses and office chemicals Li-ion/ conditioning buildings with Inverters LED lighting LCD TVs Ni-MH systems excellent thermal Solar 1. The switch to oxide ore only operations for zinc production has eliminated the use of zinc and lead concentrates and production of electrolytic lead. batteries • Vehicles insulation cells 2. Does not include materials recycled inside plants. Power semiconductors 3. Calorific values for both Japan and overseas are calculated using coefficients conforming to the Japanese Act on the Rational Use of Energy. Fuels used as reducing agents are Electrode-forming • MOS FETs Solar radiation also included. Figures in parentheses indicate the primary energy input in the case of purchased electricity and purchased steam, and calorific value for all others. Positive electrode High-efficiency materials • Power Module LEDs LCDs shielding 4. Direct emissions for both Japan and overseas are calculated using emission factors conforming to the Japanese Act on Promotion of Global Warming Countermeasures. Besides materials for motors • Sputtering targets • IGBTs CO2 emissions resulting from regulated activities, this includes CO2 emissions (253 kt-CO2) resulting from non-energy sources, which is not regulated. secondary batteries • Vapor deposition 5. Emission factors used by electric power suppliers are employed for CO2 volume emissions originating from electricity purchased in Japan. Emission factors for overseas are Solar materials based on International Energy Agency (IEA) data. Electronic component Electronic component Electrode-forming radiation- • Pastes 6. Emissions during transportation in Japan are calculated in line with the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures. materials materials materials Magnetic shielding • inks 7. Discharges into rivers flowing into enclosed seas are included as “discharges into seas.” • Lead frames • Pastes • Targets materials ink 8. Total transfers to sewerage and off-site transfers. • Solders • GaP • Pastes • Sapphire substrates Cu/PI substrates

31 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 32 Environmental Preservation Initiatives in Creating Products Material Flows within Business Activity with Low Environmental Impact

The SMM Group ascertains the amount of resources and energy it consumes, as well as the Group’s overall environmental impact in than a gasoline-engine vehicle. quantitative terms, and carries out various activities to lower environmental impact. Here we summarize the inputs and outputs to and Expansion of Energy-related Materials Business As mentioned above, both hybrid vehicles and electric from operations in Japan and overseas during FY2013. The SMM Group sees its supplying of specialty materials for vehicles need to store energy in the form of electricity, and so products with a low environmental impact to be one of its they both have a battery for that purpose. Most hybrid vehicles 1 2 Raw Materials Recycled Materials contributions to a more sustainable society. today are fitted with a nickel-metal hydride (Ni-MH) battery. Gold and silver ore 1,097 kt Raw material for batteries 6 kt Copper scrap 86 kt By focusing on energy-related materials, the SMM Group aims Ni-MH batteries use nickel hydroxide as a positive electrode Copper concentrates 1,333 kt ALC raw material, Secondary zinc 53 kt to expand its business in the domains shown in the diagram material and what is called a hydrogen storage alloy, an alloy of incl. silica rock 214 kt Nickel oxide ore 4,846 kt Secondary precious metals 3 kt INPUT Raw material for below relating to the creating, storing, and saving of energy. nickel and lanthanum or other rare earth metal, as a negative Resources & Energy Nickel matte, etc. 43 kt metalworking 1 kt Scrap for metalworking 1 kt The Battery Materials Business Management Department of electrode material. SMM manufactures the nickel hydroxide that Hydrotreating catalyst Electric arc furnace dust 128 kt raw material 38 kt the Materials Division manufactures positive electrode materials goes into making the positive electrode. ALC waste 304 t for nickel metal hydride batteries used mainly in hybrid Because electric vehicles do not have an engine and vehicles, and positive electrode materials for lithium batteries therefore use only electricity to propel the vehicle, they are 3 Energy Materials Water used in electric vehicles and other products. equipped with a lithium-ion (Li-ion) battery, which can store Heavy fuel oils 59,871 kl (2,468,575 GJ) Silica sand (for copper smelting) Freshwater total 32,119 Ml Hybrid vehicles are vehicles that use regenerative brakes and more electricity than a Ni-MH battery. Li-ion batteries use a Coal/coke 423,716 t (11,212,392 GJ) 94 kt Industrial water 13,766 Ml other electric generation systems to turn mechanical energy chemical compound combining lithium oxide and one or more Wood pellets 3,994 t (70,694 GJ) Chemicals (lime-based) 753 kt Groundwater 10,037 Ml during coasting and deceleration into electrical energy. This metal oxides such as nickel and cobalt, as a positive electrode Diesel/gasoline/kerosene 24,891 kl (934,117 GJ) Chemicals (sodium-based) 52 kt Tap water 1,709 Ml electricity is stored in an on-board battery, and then used to material, and carbon, which can store lithium ions, as a LPG/LNG 8,224 t (417,785 GJ) Chemicals (magnesium-based) Surface water 6,608 Ml power an electric motor that assists the engine during starts negative electrode material. SMM manufactures the metal oxide City gas/natural gas 4,034 Ml (183,666 GJ) 12 kt Seawater 143,536 Ml and acceleration. Recapturing and storing previously wasted compounds that go into making the positive electrode. Purchased electricity 1,759,602 MWh (17,128,135 GJ) Cement etc. 74 kt energy for later use in this way has the effect of enhancing the The demand for environmentally friendly vehicles such as the Purchased steam 1,257 GJ (1,283GJ) vehicle’s energy efficiency. Hybrid vehicles that use this hybrid and electric vehicles discussed here is expected to grow technology have a fuel economy that is, on average, 20% better more and more as time passes. By supplying battery materials than their gasoline-only counterparts, and therefore emit for these vehicles, SMM believes it can make an important

proportionally less CO2 and have a commensurately smaller contribution to reducing the environmental impact of Products1 environmental impact from driving. automobiles.

Electrolytic copper 401 kt Crude zinc oxide 2 kt Electric vehicles, on the other hand, are vehicles that use a By capitalizing on technologies for synthesizing inorganic Gold 20 t Ferro-nickel 105 kt battery and motor in place of gasoline (or other fuel) and an materials based on the refining techniques we have cultivated OUTPUT Dore 12 t Battery materials 10 kt internal combustion engine. Unlike hybrid vehicles, which over the years, and by conducting more efficient production Products & Emissions Silver 191 t Sulfuric acid 821 kt generate their electricity inside the vehicle, electric vehicles that integrates the refining of nickel and cobalt from ore with the Electrolytic nickel 50 kt Slag 1,635 kt store in their on-board battery electricity that is generated final synthesis of battery materials, we also hope to contribute Nickel sulfate 9 kt Processed metal products 1 kt outside the vehicle. As a result, the environmental impact of to reductions in the environmental impact of battery material Electrolytic cobalt 3 kt Hydrotreating catalyst 8 kt driving an electric vehicle is about the same as the manufacturing. Prime western grade zinc 52 kt ALC (Siporex) 443 Ml environmental impact of a power plant. Generally speaking, Recycling-derived products ratio 3.53% electric vehicles emit less CO2—and therefore have a smaller environmental impact during use—for every kilometer driven Emissions into the Atmosphere Emissions into Water Waste (including Items of Value)

CO2 2,721 kt Total wastewater 174,791 Ml Total waste 6,027 kt ■ SMM Materials Relating to Energy Direct emissions4 1,594 kt Discharges into seas7 166,794 Ml Landfill on premises 5,884 kt Indirect emissions5 1,103 kt Discharges into rivers 6,591 Ml Emissions during transportation Underground seepage 103 Ml Breakdown of total waste SMM Products (Japan)6 23 kt Sewerage, etc. 1,302 Ml Spoil 695 kt Applications SOx 1,610 t COD (chemical oxygen demand) 54 t Flotation tailings 751 kt Markets NOx 868 t BOD (biochemical oxygen demand) 10 t Wastewater sludge from CBNC, etc. Domains Soot and dust 165 t Total phosphorus 1 t 4,434 kt Clean Energy Technologies Solar PRTR substances 22 t Total nitrogen 85 t Industrial waste (Japan) 132 kt energy (Creating, Storing and Saving of Energy) power PRTR substances Other 15 kt generation (discharged into public water areas) 74 t vehicles Fuel PRTR substances8 2,502 t Energy efficient Energy- Energy- PRTR substances (discharged into the soil Energy-efficient cells or in landfills within business premises) 15 t • Hybrid appliances/ Lighting efficient efficient vehicles housing/offices PCs/vehicles displays appliances Solar SOFCs • Electric cells vehicles Nickel • Air- Houses and office chemicals Li-ion/ conditioning buildings with Inverters LED lighting LCD TVs Ni-MH systems excellent thermal Solar 1. The switch to oxide ore only operations for zinc production has eliminated the use of zinc and lead concentrates and production of electrolytic lead. batteries • Vehicles insulation cells 2. Does not include materials recycled inside plants. Power semiconductors 3. Calorific values for both Japan and overseas are calculated using coefficients conforming to the Japanese Act on the Rational Use of Energy. Fuels used as reducing agents are Electrode-forming • MOS FETs Solar radiation also included. Figures in parentheses indicate the primary energy input in the case of purchased electricity and purchased steam, and calorific value for all others. Positive electrode High-efficiency materials • Power Module LEDs LCDs shielding 4. Direct emissions for both Japan and overseas are calculated using emission factors conforming to the Japanese Act on Promotion of Global Warming Countermeasures. Besides materials for motors • Sputtering targets • IGBTs CO2 emissions resulting from regulated activities, this includes CO2 emissions (253 kt-CO2) resulting from non-energy sources, which is not regulated. secondary batteries • Vapor deposition 5. Emission factors used by electric power suppliers are employed for CO2 volume emissions originating from electricity purchased in Japan. Emission factors for overseas are Solar materials based on International Energy Agency (IEA) data. Electronic component Electronic component Electrode-forming radiation- • Pastes 6. Emissions during transportation in Japan are calculated in line with the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures. materials materials materials Magnetic shielding • inks 7. Discharges into rivers flowing into enclosed seas are included as “discharges into seas.” • Lead frames • Pastes • Targets materials ink 8. Total transfers to sewerage and off-site transfers. • Solders • GaP • Pastes • Sapphire substrates Cu/PI substrates

31 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 32 Environmental Preservation Biodiversity Considerations

2. Kawagoke-so (Cladopus japonicus): A rare algae-like plant found in Japan only environmental initiatives in operations. Besides environmental on the island of Yakushima and in parts of mainland Kagoshima Prefecture and Basic Approach Biodiversity Considerations Miyazaki Prefecture. A rare algae-like plant found in Japan only on the island of surveys by the EMO, a team of representatives from organizations All diverse living creatures on earth are interconnected, either At the SMM Group, we are committed to reducing our impact on Yakushima and in parts of mainland Kagoshima Prefecture and Miyazaki such as the DENR, local authorities and NGOs carry out regular Prefecture. As the plant can only grow in clear rivers with extremely high water directly or indirectly, and together they weave a magnificent circle biodiversity. Our view of factors that affect biodiversity includes the quality, it serves as an indicator of river pollution and other environmental sampling of air, water, flora and fauna, ensuring ongoing of life. This is biodiversity. Each living creature plays an important various environmental impacts associated with business, such as change. monitoring of the environment. role, and by interacting with each other and maintaining a the emission of greenhouse gases and chemical substances, the ■ balance, they support the global environment. use of water and the disposal of waste, as well as the logging of Fig. 1 ECC Acquisition Process Our society is supported by the blessings of nature produced forests and erosion of soil during development projects at mines, Biodiversity Considerations at Mines and Collection of baseline data from this biodiversity, and in order for future generations to receive smelters and refineries, and the possession of land associated Refineries these blessings of nature the same as us, it is imperative that with the establishment of facilities. biodiversity be preserved. In new projects, due consideration is given to the surrounding Initiatives in Development of the Pogo Mine Public hearings The SMM Group contributes to creating a prosperous society by environment right from the planning stage as we undertake The Pogo Mine in Alaska, U.S.A., required 83 separate permits mining ore, manufacturing non-ferrous metals and various development and operations. It is also our basic policy to engage before operations could begin as it falls under extremely stringent EIA preparation materials, and supplying them to society. At the same time though, in adequate communication with citizens of local communities and environmental protection standards enforced by state and federal given the characteristics of our business, it is unavoidable that we governments at national and regional levels, and to disclose governments. affect biodiversity, both directly and indirectly. Nevertheless, by information where permissible as requested by citizen groups and SMM undertook exhaustive environmental considerations right Meeting of the Palawan Council for Sustainable Development taking this into consideration, we can minimize any impact, or we other parties. During environmental surveys conducted by from the design stage, seeking to preserve ecosystems as well as can improve conditions better than before the development. contracted experts prior to development, if it is determined that infrastructure sustaining indigenous communities in the mine The SMM Group is moving ahead, based on the recognition that development and business activities in a locality will have a vicinity. Particularly important issues were protection of rivers Public hearings consideration of biodiversity is essential when implementing our significant impact on a rare species, then we will prepare and where salmon return to spawn and prevention of adverse effects business activities. implement management plans for preventing or minimizing, on moose habitats. Consent of indigenous communities and other local citizens restoring and compensating that impact. Groundwater from the mine is purified by a treatment plant and Currently, there are no projects in any regions requiring the partially reused in production processes. In gold extraction, water Education for Deepening Understanding preparation of such a management plan (see Table 1). that comes into contact with chemicals during the process is Expert evaluation committee meetings (x 3] In order to raise the level of our biodiversity initiatives in pursuit of Based on the philosophy outlined above, the SMM Group will isolated within a closed system to make sure it is not released. The the objective of our CSR activities, namely, “sustainable continue to engage in business taking biodiversity into impact of mine operations is confirmed through annual monitoring co-existence with society and the global environment,” the SMM consideration while further deepening the understanding of of the salmon run, as well as by catching and analyzing fish to ECC acquisition Group produced a pamphlet called Biodiversity and SMM’s management and of each level of employees. check for abnormal levels of heavy metals. Business Activities, and distributed it to all employees at SMM We have also tried to minimize the impact of mine access road Group companies in Japan. It is hoped construction on moose habitats by circumventing breeding that this pamphlet will further deepen Hishikari Mine Surveys of Protected Species grounds and understanding about the importance of The Sendai River running through Isa, Kagoshima Prefecture, prohibiting traffic getting involved in biodiversity where the Hishikari Mine is located, is home to chisujinori (Thorea not related to the preservation, and will lead to daily okadae)1, a threatened red algae protected as a Japanese natural mine. management activities of employees monument, and kawagoke-so (Cladopus japonicus)2, a riverweed getting actively involved wherever they designated as a prefectural natural monument. can based on an awareness of the The Hishikari Mine carries out independent monitoring of relationship between biodiversity and chisujinori and kawagoke-so growth and reports findings to business. government authorities and local citizens.  Pamphlet: Biodiversity and SMM’s Business Activities

1. Chisujinori (Thorea okadae): A protected freshwater algae species endemic to  Fish are caught in a river  Monitoring near the CBNC pier Japan belonging to the Thoreaceae red algae family and whose distribution is near the Pogo Mine for monitoring limited to select rivers in central and southern Kyushu. It grows mainly in flowing water, clinging to rocks and trees. The Japanese name (lit. “blood-vessel moss”) comes from its similarity in color and shape to blood vessels. Environmental Considerations in Operations at Coral Bay Initiatives for the Taganito Project Coral Bay Nickel Corporation (CBNC) in the Philippines produces At Taganito HPAL Nickel Corporation (THPAL), which started intermediates used in the manufacture of electrolytic nickel. commercially producing nickel intermediates also in the To construct a refinery in the Philippines, we first had to obtain Philippines in October 2013, we have undertaken the same ■ 3 Table 1 Business Activities in Areas of High Biodiversity Value an Environmental Compliance Certificate (ECC) from the prescribed procedures as for CBNC, including acquiring an ECC. Size of production site Area (hectares) Details Department of Environment and Natural Resources (DENR). This We have also set up an EMO at THPAL. In addition to conducting required undertaking various procedures before submission of an its own environmental monitoring, the EMO undertakes regular 62 Shisaka Smelting operates on Minoshima and Ienoshima islands, 3. Protected areas classified as Category 4 (Minoshima & Seto Inland Sea and above by the International Union for Environmental Impact Assessment (EIA) summarizing the surveys in collaboration with the DENR and other agencies. Ienoshima islands) neighboring Setonaikai National Park (IUCN Category 2) Conservation of Nature (IUCN) and environmental effects to the DENR. The project will be advanced cautiously while ensuring that plant Coral Bay Nickel Corporation operates on Palawan Island neighboring areas (SMM research). The Philippines 428 Areas classified as Category 1 are of When constructing the refinery, we sought adequate dialogue construction and operations do not have a significant impact on (in hunting-prohibited and bird protection areas (IUCN Category 4)) highest priority. with the Philippine government, local authorities and local citizens ecosystems and minimizing the environmental impact of right from the planning stage. Efforts were made to construct a wastewater and other factors. ■ Amount of Land Disturbed or Rehabilitated (hectares) plant that would have a minimal impact on the environment. For Total area of land disturbed but example, a pier used to deliver sulfuric acid and methanol to the Area of land newly Area of land newly Total area of land disturbed A not rehabilitated B C D disturbed in FY2013 rehabilitated in FY2013 but not rehabilitated (A+B-C) plant was made to circle around the coral reef, and wastewater (as of the end of FY2012) outlets were also positioned to ensure the reef’s protection. Hishikari Mine 22 0 0 22 CBNC began operations of the refinery in 2005 based on an Pogo Mine 158 2 0 160 environmentally responsible design certified after passing through

CBNC 349 0 22 327 such procedures (See Fig. 1). The refinery has set up an Environmental Management Office (EMO) to promote THPAL 278 30 79 229

33 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 34 Environmental Preservation Biodiversity Considerations

2. Kawagoke-so (Cladopus japonicus): A rare algae-like plant found in Japan only environmental initiatives in operations. Besides environmental on the island of Yakushima and in parts of mainland Kagoshima Prefecture and Basic Approach Biodiversity Considerations Miyazaki Prefecture. A rare algae-like plant found in Japan only on the island of surveys by the EMO, a team of representatives from organizations All diverse living creatures on earth are interconnected, either At the SMM Group, we are committed to reducing our impact on Yakushima and in parts of mainland Kagoshima Prefecture and Miyazaki such as the DENR, local authorities and NGOs carry out regular Prefecture. As the plant can only grow in clear rivers with extremely high water directly or indirectly, and together they weave a magnificent circle biodiversity. Our view of factors that affect biodiversity includes the quality, it serves as an indicator of river pollution and other environmental sampling of air, water, flora and fauna, ensuring ongoing of life. This is biodiversity. Each living creature plays an important various environmental impacts associated with business, such as change. monitoring of the environment. role, and by interacting with each other and maintaining a the emission of greenhouse gases and chemical substances, the ■ balance, they support the global environment. use of water and the disposal of waste, as well as the logging of Fig. 1 ECC Acquisition Process Our society is supported by the blessings of nature produced forests and erosion of soil during development projects at mines, Biodiversity Considerations at Mines and Collection of baseline data from this biodiversity, and in order for future generations to receive smelters and refineries, and the possession of land associated Refineries these blessings of nature the same as us, it is imperative that with the establishment of facilities. biodiversity be preserved. In new projects, due consideration is given to the surrounding Initiatives in Development of the Pogo Mine Public hearings The SMM Group contributes to creating a prosperous society by environment right from the planning stage as we undertake The Pogo Mine in Alaska, U.S.A., required 83 separate permits mining ore, manufacturing non-ferrous metals and various development and operations. It is also our basic policy to engage before operations could begin as it falls under extremely stringent EIA preparation materials, and supplying them to society. At the same time though, in adequate communication with citizens of local communities and environmental protection standards enforced by state and federal given the characteristics of our business, it is unavoidable that we governments at national and regional levels, and to disclose governments. affect biodiversity, both directly and indirectly. Nevertheless, by information where permissible as requested by citizen groups and SMM undertook exhaustive environmental considerations right Meeting of the Palawan Council for Sustainable Development taking this into consideration, we can minimize any impact, or we other parties. During environmental surveys conducted by from the design stage, seeking to preserve ecosystems as well as can improve conditions better than before the development. contracted experts prior to development, if it is determined that infrastructure sustaining indigenous communities in the mine The SMM Group is moving ahead, based on the recognition that development and business activities in a locality will have a vicinity. Particularly important issues were protection of rivers Public hearings consideration of biodiversity is essential when implementing our significant impact on a rare species, then we will prepare and where salmon return to spawn and prevention of adverse effects business activities. implement management plans for preventing or minimizing, on moose habitats. Consent of indigenous communities and other local citizens restoring and compensating that impact. Groundwater from the mine is purified by a treatment plant and Currently, there are no projects in any regions requiring the partially reused in production processes. In gold extraction, water Education for Deepening Understanding preparation of such a management plan (see Table 1). that comes into contact with chemicals during the process is Expert evaluation committee meetings (x 3] In order to raise the level of our biodiversity initiatives in pursuit of Based on the philosophy outlined above, the SMM Group will isolated within a closed system to make sure it is not released. The the objective of our CSR activities, namely, “sustainable continue to engage in business taking biodiversity into impact of mine operations is confirmed through annual monitoring co-existence with society and the global environment,” the SMM consideration while further deepening the understanding of of the salmon run, as well as by catching and analyzing fish to ECC acquisition Group produced a pamphlet called Biodiversity and SMM’s management and of each level of employees. check for abnormal levels of heavy metals. Business Activities, and distributed it to all employees at SMM We have also tried to minimize the impact of mine access road Group companies in Japan. It is hoped construction on moose habitats by circumventing breeding that this pamphlet will further deepen Hishikari Mine Surveys of Protected Species grounds and understanding about the importance of The Sendai River running through Isa, Kagoshima Prefecture, prohibiting traffic getting involved in biodiversity where the Hishikari Mine is located, is home to chisujinori (Thorea not related to the preservation, and will lead to daily okadae)1, a threatened red algae protected as a Japanese natural mine. management activities of employees monument, and kawagoke-so (Cladopus japonicus)2, a riverweed getting actively involved wherever they designated as a prefectural natural monument. can based on an awareness of the The Hishikari Mine carries out independent monitoring of relationship between biodiversity and chisujinori and kawagoke-so growth and reports findings to business. government authorities and local citizens.  Pamphlet: Biodiversity and SMM’s Business Activities

1. Chisujinori (Thorea okadae): A protected freshwater algae species endemic to  Fish are caught in a river  Monitoring near the CBNC pier Japan belonging to the Thoreaceae red algae family and whose distribution is near the Pogo Mine for monitoring limited to select rivers in central and southern Kyushu. It grows mainly in flowing water, clinging to rocks and trees. The Japanese name (lit. “blood-vessel moss”) comes from its similarity in color and shape to blood vessels. Environmental Considerations in Operations at Coral Bay Initiatives for the Taganito Project Coral Bay Nickel Corporation (CBNC) in the Philippines produces At Taganito HPAL Nickel Corporation (THPAL), which started intermediates used in the manufacture of electrolytic nickel. commercially producing nickel intermediates also in the To construct a refinery in the Philippines, we first had to obtain Philippines in October 2013, we have undertaken the same ■ 3 Table 1 Business Activities in Areas of High Biodiversity Value an Environmental Compliance Certificate (ECC) from the prescribed procedures as for CBNC, including acquiring an ECC. Size of production site Area (hectares) Details Department of Environment and Natural Resources (DENR). This We have also set up an EMO at THPAL. In addition to conducting required undertaking various procedures before submission of an its own environmental monitoring, the EMO undertakes regular 62 Shisaka Smelting operates on Minoshima and Ienoshima islands, 3. Protected areas classified as Category 4 (Minoshima & Seto Inland Sea and above by the International Union for Environmental Impact Assessment (EIA) summarizing the surveys in collaboration with the DENR and other agencies. Ienoshima islands) neighboring Setonaikai National Park (IUCN Category 2) Conservation of Nature (IUCN) and environmental effects to the DENR. The project will be advanced cautiously while ensuring that plant Coral Bay Nickel Corporation operates on Palawan Island neighboring areas (SMM research). The Philippines 428 Areas classified as Category 1 are of When constructing the refinery, we sought adequate dialogue construction and operations do not have a significant impact on (in hunting-prohibited and bird protection areas (IUCN Category 4)) highest priority. with the Philippine government, local authorities and local citizens ecosystems and minimizing the environmental impact of right from the planning stage. Efforts were made to construct a wastewater and other factors. ■ Amount of Land Disturbed or Rehabilitated (hectares) plant that would have a minimal impact on the environment. For Total area of land disturbed but example, a pier used to deliver sulfuric acid and methanol to the Area of land newly Area of land newly Total area of land disturbed A not rehabilitated B C D disturbed in FY2013 rehabilitated in FY2013 but not rehabilitated (A+B-C) plant was made to circle around the coral reef, and wastewater (as of the end of FY2012) outlets were also positioned to ensure the reef’s protection. Hishikari Mine 22 0 0 22 CBNC began operations of the refinery in 2005 based on an Pogo Mine 158 2 0 160 environmentally responsible design certified after passing through

CBNC 349 0 22 327 such procedures (See Fig. 1). The refinery has set up an Environmental Management Office (EMO) to promote THPAL 278 30 79 229

33 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 34 Environmental Preservation Initiatives in the Six Key CSR Areas Environmental Preservation

Tailings Dam Rehabilitation at CBNC Wastewater Management at Isoura Plant Management of Closed/Suspended Mines

▲Enhanced wastewater treatment facilities ▲The Hoshigoe mine water treatment plant The Isoura Plant faces onto Japan’s Seto Inland Sea, a rich Even though the hills around the former Besshi Copper Mine natural environment. Starting out as a small-scale electronic are once again covered in vegetation and have returned to materials development plant, it has grown together with being part of nature, 41 years on from the mine’s closure, advancements in the electronics and automotive industries, mine water drawn from Adit No. 42 continues to flow along 9.6 such as LCD TVs, compact telecommunications devices, km of water channels, which cut through the center of and battery-equipped hybrid vehicles. Because we Niihama City, and is treated at two facilities along the way manufacture products using nickel sulfate solutions purified before being discharged into the Seto Inland Sea. at the Niihama Nickel Refinery as a primary material, and a Part of our job involves carrying out inspections of the entire wide range of other chemicals, we are very careful about network of mine water channels on foot and performing the wastewater generated at the plant. In particular, our maintenance and repairs on the channels and surrounds to wastewater runs directly into the Seto Inland Sea and so we ensure that not even one drop of untreated mine water ▲Tailings Storage Facility No.1 after (above) and before rehabilitation (right) take extra-special care in its management since the inland overflows into urban areas. The water undergoes appropriate sea’s unique environment is subject to strict controls under treatment at the Yamane and Hoshigoe treatment plants. We the Act on Special Measures Concerning Conservation of also circulate around and monitor mines once administered by the Environment of the Seto Inland Sea. SMM, but which are now closed, located in Ehime Prefecture Coral Bay Nickel Corporation (CBNC) uses high-pressure As production at the plant is currently increasing, and Kochi Prefecture, in addition to the Besshi Copper Mine acid leaching (HPAL) technology to produce mixed wastewater is also on the rise. To cope with the situation, (The Sazare Mine is under the control of head office) and nickel-cobalt sulfides from low-grade nickel oxide ores. The we are enhancing our facilities, for example by associated accumulation sites. residue generated through this process (a form of slurry strengthening wastewater treatment facilities, and by While water from the Besshi Copper Mine looks to have 1 with high iron content) is collected in a tailings dam . backing up wastewater containment facilities that will stabilized over time, it appears that the abnormal weather of CBNC’s Tailings Storage Facility No.1 (TSF-1), utilized since prevent untreated water, or any of the various chemicals, late has caused the degree and frequency of water yield operations began in 2005, reached full capacity in July oils and other potential contaminants used at the plant, increases to rise. Any error in our response to an abnormal 2010. The area of about 800,000 m2 was reddish in color from being released into the outside environment in situation could lead to an environmental accident, and and not nice to look at. Plants could not grow as there were with flowers with the goal of creating a natural butterfly abnormal circumstances. We are also making operational therefore we have increased the frequency and level of our no nutrients and a large amount of dust was expected to be garden; and (3) A walkway was established for visitors to improvements, such as ensuring close control of processes response drills. We are also working to raise the level of our generated in the dry season. To prevent these problems give them a better understanding about our rehabilitation to prevent delays in routine wastewater treatment; crisis management capability through the introduction of new and return the vast tract of land to nature, vegetation was activities. strengthening of monitoring and measuring equipment monitoring systems and facilities that will enable us to planted and grown using organic fertilizer. Slowly the In due course, the rehabilitated tailings dam will be maintenance; and the repeated implementation of drills to promptly detect an abnormality and take appropriate action reddish landscape turned green. testimony to the ability to restore land developed for mining familiarize ourselves with abnormal situations. to prevent damage or destruction of mine water channels Two years later, the vast grassland was producing large to its natural state. We will continue to focus on our wastewater treatment due, for example, to heavy rain or an earthquake. As well as operations with a commitment to protecting the natural building upon the technology and facilities we have inherited quantities of natural nutrients that enriched the soil, making 1. Tailings dam: A dam for accumulating and dehydrating tailings slurry. Widely it ready for tree-planting and agriculture. Since January used in mining for processing waste materials generated during mineral environment of the Seto Inland Sea, so that the benefits it from our predecessors, I would like to ensure that we pass on processing. provides may be enjoyed on into the future. to the next generation, five to 10 years from now, a strong 2013, 2,000 coconut trees and hundreds of fruit and forest sense of responsibility and duty that we must co-exist with trees have been planted and are growing well. Other the environment. measures taken are as follows: (1) Part of the area is now used for growing vegetables, as well as crops like rice, 2. Adit No.4: The main artery of the Besshi Copper Mine with a total length of 4,596 2 corn and dragon fruit; (2) Around 1,000 m was planted meters, constructed to improve transportation efficiency. Work began in 1910 and it opened in 1915.

Briccio Abela Masahiro Yamanaka Senior Staff, Closed & Section Manager Hideo Murakami Environment Management and Suspended Mine Group, Safety & Quality Control Section Manager, Environment Sect., Environment Control Center, Coral Bay Nickel Corporation Isoura Plant, Materials Div. Besshi-Niihama District Div.

My Way of My Way of Doing Good Doing Good I cycle to work every day. It’s both good for me and energy efficient, so it serves two purposes at once. My I am in charge of freighter operation control in the Sales Department. As initiatives to prevent pollution of the sea family ride bicycles, too, now after following my lead. I want to act in a way that makes me a good example not by shipping vessels, we carry out spill prevention activities and sort and collect general living waste from just for my family, but also for others, such as colleagues at work. freighters. As all life originated in the ocean, I would like to aim for environmentally friendly operations so that we can leave behind a clean sea for future generations. Liu Yufeng Sumiko Advanced Materials (Suzhou) Co., Ltd. Masamitsu Kokami Sumiko Logistics Co., Ltd.

35 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 36 Environmental Preservation Initiatives in the Six Key CSR Areas Environmental Preservation

Tailings Dam Rehabilitation at CBNC Wastewater Management at Isoura Plant Management of Closed/Suspended Mines

▲Enhanced wastewater treatment facilities ▲The Hoshigoe mine water treatment plant The Isoura Plant faces onto Japan’s Seto Inland Sea, a rich Even though the hills around the former Besshi Copper Mine natural environment. Starting out as a small-scale electronic are once again covered in vegetation and have returned to materials development plant, it has grown together with being part of nature, 41 years on from the mine’s closure, advancements in the electronics and automotive industries, mine water drawn from Adit No. 42 continues to flow along 9.6 such as LCD TVs, compact telecommunications devices, km of water channels, which cut through the center of and battery-equipped hybrid vehicles. Because we Niihama City, and is treated at two facilities along the way manufacture products using nickel sulfate solutions purified before being discharged into the Seto Inland Sea. at the Niihama Nickel Refinery as a primary material, and a Part of our job involves carrying out inspections of the entire wide range of other chemicals, we are very careful about network of mine water channels on foot and performing the wastewater generated at the plant. In particular, our maintenance and repairs on the channels and surrounds to wastewater runs directly into the Seto Inland Sea and so we ensure that not even one drop of untreated mine water ▲Tailings Storage Facility No.1 after (above) and before rehabilitation (right) take extra-special care in its management since the inland overflows into urban areas. The water undergoes appropriate sea’s unique environment is subject to strict controls under treatment at the Yamane and Hoshigoe treatment plants. We the Act on Special Measures Concerning Conservation of also circulate around and monitor mines once administered by the Environment of the Seto Inland Sea. SMM, but which are now closed, located in Ehime Prefecture Coral Bay Nickel Corporation (CBNC) uses high-pressure As production at the plant is currently increasing, and Kochi Prefecture, in addition to the Besshi Copper Mine acid leaching (HPAL) technology to produce mixed wastewater is also on the rise. To cope with the situation, (The Sazare Mine is under the control of head office) and nickel-cobalt sulfides from low-grade nickel oxide ores. The we are enhancing our facilities, for example by associated accumulation sites. residue generated through this process (a form of slurry strengthening wastewater treatment facilities, and by While water from the Besshi Copper Mine looks to have 1 with high iron content) is collected in a tailings dam . backing up wastewater containment facilities that will stabilized over time, it appears that the abnormal weather of CBNC’s Tailings Storage Facility No.1 (TSF-1), utilized since prevent untreated water, or any of the various chemicals, late has caused the degree and frequency of water yield operations began in 2005, reached full capacity in July oils and other potential contaminants used at the plant, increases to rise. Any error in our response to an abnormal 2010. The area of about 800,000 m2 was reddish in color from being released into the outside environment in situation could lead to an environmental accident, and and not nice to look at. Plants could not grow as there were with flowers with the goal of creating a natural butterfly abnormal circumstances. We are also making operational therefore we have increased the frequency and level of our no nutrients and a large amount of dust was expected to be garden; and (3) A walkway was established for visitors to improvements, such as ensuring close control of processes response drills. We are also working to raise the level of our generated in the dry season. To prevent these problems give them a better understanding about our rehabilitation to prevent delays in routine wastewater treatment; crisis management capability through the introduction of new and return the vast tract of land to nature, vegetation was activities. strengthening of monitoring and measuring equipment monitoring systems and facilities that will enable us to planted and grown using organic fertilizer. Slowly the In due course, the rehabilitated tailings dam will be maintenance; and the repeated implementation of drills to promptly detect an abnormality and take appropriate action reddish landscape turned green. testimony to the ability to restore land developed for mining familiarize ourselves with abnormal situations. to prevent damage or destruction of mine water channels Two years later, the vast grassland was producing large to its natural state. We will continue to focus on our wastewater treatment due, for example, to heavy rain or an earthquake. As well as operations with a commitment to protecting the natural building upon the technology and facilities we have inherited quantities of natural nutrients that enriched the soil, making 1. Tailings dam: A dam for accumulating and dehydrating tailings slurry. Widely it ready for tree-planting and agriculture. Since January used in mining for processing waste materials generated during mineral environment of the Seto Inland Sea, so that the benefits it from our predecessors, I would like to ensure that we pass on processing. provides may be enjoyed on into the future. to the next generation, five to 10 years from now, a strong 2013, 2,000 coconut trees and hundreds of fruit and forest sense of responsibility and duty that we must co-exist with trees have been planted and are growing well. Other the environment. measures taken are as follows: (1) Part of the area is now used for growing vegetables, as well as crops like rice, 2. Adit No.4: The main artery of the Besshi Copper Mine with a total length of 4,596 2 corn and dragon fruit; (2) Around 1,000 m was planted meters, constructed to improve transportation efficiency. Work began in 1910 and it opened in 1915.

Briccio Abela Masahiro Yamanaka Senior Staff, Closed & Section Manager Hideo Murakami Environment Management and Suspended Mine Group, Safety & Quality Control Section Manager, Environment Sect., Environment Control Center, Coral Bay Nickel Corporation Isoura Plant, Materials Div. Besshi-Niihama District Div.

My Way of My Way of Doing Good Doing Good I cycle to work every day. It’s both good for me and energy efficient, so it serves two purposes at once. My I am in charge of freighter operation control in the Sales Department. As initiatives to prevent pollution of the sea family ride bicycles, too, now after following my lead. I want to act in a way that makes me a good example not by shipping vessels, we carry out spill prevention activities and sort and collect general living waste from just for my family, but also for others, such as colleagues at work. freighters. As all life originated in the ocean, I would like to aim for environmentally friendly operations so that we can leave behind a clean sea for future generations. Liu Yufeng Sumiko Advanced Materials (Suzhou) Co., Ltd. Masamitsu Kokami Sumiko Logistics Co., Ltd.

35 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 36 Initiatives in the Six Key CSR Areas Basic Approach

The SMM Group has long been contributing to local communities while advancing its business, not only by securing Contribution to Society and housing for employees and their families, but also by supporting infrastructure that benefits the entire region in such a wide range of areas as medical care, education and culture. We have also shown concern for regional environments. SMM Group continues to incorporate consideration toward local communities into activities today in line with the SMM Group Corporate Philosophy and Management Vision, and the CSR Policy. Due deliberation is made during meetings of various Vision  Local Communities for 2020 A company in which employees are proud to work along with the company on social contribution activities kinds to ensure that decisions made within various projects do not act counter to SMM Group policy or philosophy. rooted in the area

Target FY2013 Achievements Challenges FY2014 Plan Support the development of human ● Continued support for Niihama Manufacturing Industry Promotion ● Overall human resources ● Support activities are still in progress ● resources in local communities Center, including staff dispatch development support Information about human resources development support for the entire SMM Group ● Accepted one intern from Shanghai Jiao Tong University with achievements for the entire SMM is being obtained and sorted preliminary promise of employment in FY2015 Group not yet obtained ● Provide preliminary training for soon-to-be-hired foreign nationals, and continue ● Made donations to an NGO supporting school attendance for scholarship support impoverished people in Manila ● Accept visits by Matsuyama Higashi High School (designated a “Super Global High School” by the Ministry of Education, Culture, Sports, Science and Technology) at facilities in the Besshi district and China

Contribute to maintaining and ● Renovation of Sumitomo Besshi Hospital in Niihama, ● Needs-based support ● Provide continuous supports to meet the needs of local communities ● developing the living conditions, management of schools and hospitals in the Philippines and Support for other cultural and educational activities in connection to SMM business elsewhere, donations of funds for infrastructure business and culture and traditions of local infrastructure facilities in Japan and overseas at SMM business communities without impeding their locations independence or harmony ● Donations to universities and research organizations

Have employees also actively ● Make effective use of CSR awards system and other initiatives to ● Establish a culture that ● Make effective use of CSR awards system and other initiatives to encourage social participate in social contribution encourage social contribution activities by employees encourages familiarity with contribution activities by employees ● Conduct survey to gain understanding about social contribution social contribution activities ● Conduct survey to gain understanding about social contribution activities activities activities implemented by employees implemented by employees ● Look into and draw up a proposal for introducing a leave program ● Look into and draw up a proposal for introducing a leave program for participating in for participating in long-term social contribution activities long-term social contribution activities

Implement as many assistance ● Contributed funds to support relief efforts for heavy rain and ● Ongoing provision of support ● As chair of council for promoting measures to prevent crowds around Shimbashi Station measures as possible to help with typhoon damage in the Philippines, earthquake damage in following devastating disasters in times of disaster, implement disaster drills at the Shimbashi Sumitomo Building and China’s Sichuan Province, and typhoon damage on Japan’s activities linked to SMM’s business continuity management (BCM) and business recovery and reconstruction following Izu-Oshima island continuity plans (BCPs) in coordination with Minato Ward and council members devastating disasters anywhere in the ● Focus on support for victims in times of disasters in Japan designated “extremely world severe disaster” ● In times of devastating disasters outside Japan, provide strategic support taking into account the level of human damage and the relationship of the stricken country or region to SMM’s business

Provide ongoing assistance to victims ● Contribution to education fund for the three disaster-struck ● Support according to the needs of ● Continue support for affected areas and people while ascertaining circumstances of the Great East Japan Earthquake prefectures (Iwate, Miyagi and Fukushima) the disaster-affected areas ● Donated 5 tons of rice from Kyowa-cho, Hokkaido, to victims of the Great East Japan Earthquake ● Held a CSR forum

Expectations for the SMM Group Subcommittee Chairman’s Comment What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 Overseas facilities now account for around 40% of the workforce and sales. Therefore, in regard to social and SMM does business in many different regions both inside and outside Japan and we believe we have to community contribution, too, it is essential that regional factors are taken into account and that you manage to carry out ongoing contribution activities rooted in local areas. We spent the equivalent of 1% of recurring communicate your overall approach to themes both within and outside the company. On that note, your current profit on social contribution activities inside and outside Japan again in FY2013, and we intend to maintain theme of developing the next generation is a good one. Please use this as a central theme and try to find a that level while seeking close communication with stakeholders and persisting with activities that match unique format that works for the SMM Group. As for support for reconstruction in the wake of a disaster, activities local needs. during times of normality come into play. Developing systems allowing employee participation are important, but Response to Stakeholder Comments for these to be effective, you need mechanisms and devices to encourage participation. It is this effort and Developing human resources who are going to sustain the next generation is a major theme of SMM’s ingenuity which determines a plan’s success or otherwise . social contribution and, in particular, it is one aspect of our active efforts to provide support for education In your view, what does society require in regard to contribution to society and local communities? and resolve poverty-related issues in developing nations where we operate. Providing assistance to Considering the nature of the SMM Group’s core businesses—mineral resources, smelting and refining, and communities affected by major natural disasters is our other company-wide theme, and through these two materials—and the Six Key CSR Areas, I think the material issues come down to protecting the natural themes we will practice “think globally, act locally.” As systems for encouraging employee participation in environment, correcting rich-poor disparity, respecting cultures unique to specific regions, and training human social contribution activities, we already have a CSR awards system for honoring outstanding activities resources to achieve these, all based on the idea of “think globally, act locally.” A diverse workforce and two-way and a volunteer leave program, but we are also looking into introducing a long-term leave program as a Yoko Takahashi communication with each of the different types of stakeholder also provide valuable viewpoints when considering way to further promote volunteering in social contribution activities and international cooperation. By Koji Imai President contribution to society and environmental preservation and the others of the Six Key CSR Areas. I hope you will sharing information about activities implemented at each workplace and other such initiatives, individuals Chairman, Corporate Citizenship Subcommittee; Japan Philanthropic Association allow an organic link between these two factors, with open discussions and give full play to the DNA of SMM in will gain greater awareness about social contribution, which I hope will gradually translate into action. General Manager, Legal & General Affairs Dept. the present day. 37 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 38 Initiatives in the Six Key CSR Areas Basic Approach

The SMM Group has long been contributing to local communities while advancing its business, not only by securing Contribution to Society and housing for employees and their families, but also by supporting infrastructure that benefits the entire region in such a wide range of areas as medical care, education and culture. We have also shown concern for regional environments. SMM Group continues to incorporate consideration toward local communities into activities today in line with the SMM Group Corporate Philosophy and Management Vision, and the CSR Policy. Due deliberation is made during meetings of various Vision  Local Communities for 2020 A company in which employees are proud to work along with the company on social contribution activities kinds to ensure that decisions made within various projects do not act counter to SMM Group policy or philosophy. rooted in the area

Target FY2013 Achievements Challenges FY2014 Plan Support the development of human ● Continued support for Niihama Manufacturing Industry Promotion ● Overall human resources ● Support activities are still in progress ● resources in local communities Center, including staff dispatch development support Information about human resources development support for the entire SMM Group ● Accepted one intern from Shanghai Jiao Tong University with achievements for the entire SMM is being obtained and sorted preliminary promise of employment in FY2015 Group not yet obtained ● Provide preliminary training for soon-to-be-hired foreign nationals, and continue ● Made donations to an NGO supporting school attendance for scholarship support impoverished people in Manila ● Accept visits by Matsuyama Higashi High School (designated a “Super Global High School” by the Ministry of Education, Culture, Sports, Science and Technology) at facilities in the Besshi district and China

Contribute to maintaining and ● Renovation of Sumitomo Besshi Hospital in Niihama, ● Needs-based support ● Provide continuous supports to meet the needs of local communities ● developing the living conditions, management of schools and hospitals in the Philippines and Support for other cultural and educational activities in connection to SMM business elsewhere, donations of funds for infrastructure business and culture and traditions of local infrastructure facilities in Japan and overseas at SMM business communities without impeding their locations independence or harmony ● Donations to universities and research organizations

Have employees also actively ● Make effective use of CSR awards system and other initiatives to ● Establish a culture that ● Make effective use of CSR awards system and other initiatives to encourage social participate in social contribution encourage social contribution activities by employees encourages familiarity with contribution activities by employees ● Conduct survey to gain understanding about social contribution social contribution activities ● Conduct survey to gain understanding about social contribution activities activities activities implemented by employees implemented by employees ● Look into and draw up a proposal for introducing a leave program ● Look into and draw up a proposal for introducing a leave program for participating in for participating in long-term social contribution activities long-term social contribution activities

Implement as many assistance ● Contributed funds to support relief efforts for heavy rain and ● Ongoing provision of support ● As chair of council for promoting measures to prevent crowds around Shimbashi Station measures as possible to help with typhoon damage in the Philippines, earthquake damage in following devastating disasters in times of disaster, implement disaster drills at the Shimbashi Sumitomo Building and China’s Sichuan Province, and typhoon damage on Japan’s activities linked to SMM’s business continuity management (BCM) and business recovery and reconstruction following Izu-Oshima island continuity plans (BCPs) in coordination with Minato Ward and council members devastating disasters anywhere in the ● Focus on support for victims in times of disasters in Japan designated “extremely world severe disaster” ● In times of devastating disasters outside Japan, provide strategic support taking into account the level of human damage and the relationship of the stricken country or region to SMM’s business

Provide ongoing assistance to victims ● Contribution to education fund for the three disaster-struck ● Support according to the needs of ● Continue support for affected areas and people while ascertaining circumstances of the Great East Japan Earthquake prefectures (Iwate, Miyagi and Fukushima) the disaster-affected areas ● Donated 5 tons of rice from Kyowa-cho, Hokkaido, to victims of the Great East Japan Earthquake ● Held a CSR forum

Expectations for the SMM Group Subcommittee Chairman’s Comment What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 Overseas facilities now account for around 40% of the workforce and sales. Therefore, in regard to social and SMM does business in many different regions both inside and outside Japan and we believe we have to community contribution, too, it is essential that regional factors are taken into account and that you manage to carry out ongoing contribution activities rooted in local areas. We spent the equivalent of 1% of recurring communicate your overall approach to themes both within and outside the company. On that note, your current profit on social contribution activities inside and outside Japan again in FY2013, and we intend to maintain theme of developing the next generation is a good one. Please use this as a central theme and try to find a that level while seeking close communication with stakeholders and persisting with activities that match unique format that works for the SMM Group. As for support for reconstruction in the wake of a disaster, activities local needs. during times of normality come into play. Developing systems allowing employee participation are important, but Response to Stakeholder Comments for these to be effective, you need mechanisms and devices to encourage participation. It is this effort and Developing human resources who are going to sustain the next generation is a major theme of SMM’s ingenuity which determines a plan’s success or otherwise . social contribution and, in particular, it is one aspect of our active efforts to provide support for education In your view, what does society require in regard to contribution to society and local communities? and resolve poverty-related issues in developing nations where we operate. Providing assistance to Considering the nature of the SMM Group’s core businesses—mineral resources, smelting and refining, and communities affected by major natural disasters is our other company-wide theme, and through these two materials—and the Six Key CSR Areas, I think the material issues come down to protecting the natural themes we will practice “think globally, act locally.” As systems for encouraging employee participation in environment, correcting rich-poor disparity, respecting cultures unique to specific regions, and training human social contribution activities, we already have a CSR awards system for honoring outstanding activities resources to achieve these, all based on the idea of “think globally, act locally.” A diverse workforce and two-way and a volunteer leave program, but we are also looking into introducing a long-term leave program as a Yoko Takahashi communication with each of the different types of stakeholder also provide valuable viewpoints when considering way to further promote volunteering in social contribution activities and international cooperation. By Koji Imai President contribution to society and environmental preservation and the others of the Six Key CSR Areas. I hope you will sharing information about activities implemented at each workplace and other such initiatives, individuals Chairman, Corporate Citizenship Subcommittee; Japan Philanthropic Association allow an organic link between these two factors, with open discussions and give full play to the DNA of SMM in will gain greater awareness about social contribution, which I hope will gradually translate into action. General Manager, Legal & General Affairs Dept. the present day. 37 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 38 Contribution to Society and Local Communities Relations with Society

■ Reserves for Mine Closures Impact on Local Economies Social Contribution Activities Major Donations in FY2013 At business facilities where SMM Group activities have a Mine Reserve name Reserves (2013) The SMM Group carries out a wide range of social considerable impact on the local economy we contribute to Mine pollution contribution activities in Japan and overseas. The Corporate Support for areas in Japan and overseas struck by the community in a variety of ways such as through Hishikari Mine control reserve ¥19.22 million Citizenship Subcommittee within the CSR Committee has disaster considerations regarding supplier selection and been deliberating on specific social contribution measures • Contribution for typhoon-damaged Izu-Oshima employment. Pogo Mine Reclamation Bond US$57.10 million* suitable for SMM, which is aiming to become “a company in Island For example, the Pogo Mine procures materials and which employees are proud to work along with the company • Contribution for typhoon damage in the Philippines equipment from some 247 suppliers in Alaska, and the total * Total reserves for the entire project. The burden of costs, when they actually on social contribution activities rooted in the area,” as incur, will be divided among companies according to their participating • Contribution collected by employees for typhoon value of those transactions is around US$72 million a year. expressed in the Vision for 2020. interest. damage in the Philippines Efforts have been made to employ local Alaskans, and now Initiatives centering on the four areas below were 69% of the approximate 300 employees live in Alaska. Our implemented in each location during 2013: • Contribution for earthquake damage in Sichuan Province, China other efforts have included providing ongoing financial In the Philippines, we are required to submit a closure (1) Support for personnel training and infrastructure assistance to the city of Delta Junction, the closest maintenance in local communities and cleanup plan, not only for closure of the mine, Support for the areas struck by the Great East Japan municipality to the mine, and making donations to the (2) Restoration and reconstruction support after but also for the refinery and mineral processing plant Earthquake University of Alaska Fairbanks. devastating disasters in Japan and overseas at the Coral Bay Nickel Corporation (CBNC). We are • Contribution to the Iwate Learning Hope Fund At CBNC in the Philippines, efforts have been made to (3) Support in the fields of the environment, academia also required to put aside funds needed for the • Contribution to the Great East Japan Earthquake employ locals from Bataraza, achieving a ratio of 57%. At and culture closure of any related workplaces. The total cost Miyagi Children’s Education Fund THPAL, which commenced operations in October 2013 also (4) Support for employee activities that contribute to according to the closure plan submitted by CBNC to in the Philippines, efforts have been made to employ locals society • Contribution to the Great East Japan Earthquake from Claver, who now account for 44% of the workforce. In the Department of Environmental and Natural Fukushima Children’s Fund each of these communities, we are continuing to provide Resources (DENR) is 110 million pesos, and funds • Donation of rice produced in Kyowa, Hokkaido support such as for school education, health care, hygiene will be set aside every year for an eight-year period • In-house activities, including a seminar on the and better living conditions. starting in 2012. conditions in affected areas and a spot sale of We are also providing assistance via SDMP* to help produce from Miyagi Prefecture Starting/Ceasing Operations local residents make a living (such as in the farming Academic support When starting up business in a region—or withdrawing from and fishing industries) even after closure of a facility. • Support and contribution to universities, support for it—meetings are held by the Management Committee and the protection of cultural assets, etc. others involved to determine how to respond to political and * SDMP: Social Development Management Program, conducted by a economic risks, risks to humans, and other risks relating, for company for the sake of the welfare of residents living in an area of • Contribution to the Japanese Foundation for Cancer its business activities example, to region-specific diseases, employment, labor Research disputes and other labor issues, religious constraints, and border disputes. If a crisis occurs, we clearly identify the Nature conservation • Contribution to the Keidanren Nature Conservation causes and take swift action. The SMM Group requires Involvement with Local Communities serious matters at any business facility, subsidiary, or affiliate Fund to be discussed in a timely fashion. Agreements are entered into communities in line with the law at the Pogo Mine and other mines, smelters and refineries in which the SMM Group has more than a 50% interest. Mine Closure Plans In 2013, budget briefings were held in April and Examples of Social Recognition Taking into consideration the treatment procedures that must September. be carried out once mining is finished, the SMM Group The ComRel (Community Relations) section was Some of the awards received by the SMM Group in FY2013. makes an effort to minimize the impact on the environment established under the CBNC General Affairs Department. By during the development stage. When actually closing a mine, means of the Information Education Campaign ( ) activity, IEC Recognition (Awarding party) Date Recipients Award received for procedures are advanced in a proper manner in keeping this section is regularly sharing information with the 11 with the SMM Group Corporate Philosophy and in impact barangays in the Rio Tuba area. Once every two Shigeo Hata Involvement in the development of mines Sumiko Resources for 34 years, and efforts to train workers, accordance with laws and regulations. At mines in which Medal with Yellow Ribbon (Cabinet Office, November 3, 2013 months, CBNC top management holds a discussion with the Government of Japan) Exploration & Development improve productivity and create “safety SMM has more than a 50% interest, we draw up suitable authorities in Rio Tuba in order to exchange ideas with the Co., Ltd. first” workplaces plans once closure of the mine is foreseeable. Closure local communities, which passes on an understanding of our Ranked No. 1 in the Iron/Non-ferrous Metals Award for Excellence in Corporate Disclosure Sumitomo Metal Mining formalities and management are carried out according to the activities and helps to create a stabilized business. October 11, 2013 Category as evaluated by securities (Securities Analysts Association of Japan) Co., Ltd. laws of the country in question. As part of the process of obtaining a permit for the Pogo analysts (three consecutive years) Future environmental considerations at the Hishikari Mine Mine, “G2G consultations” were undertaken by the Alaska Best IR Award Sumitomo Metal Mining Excellence in investor relations activities include shaping spoil heaps into slopes, covering them with state government. This involved providing explanations (Japan Investor Relations Association (JIRA)) December 16, 2013 Co., Ltd. (second award, first time in two years) soil if necessary, and then spraying with seed to create about the project to communities located within a radius of FY2013 Award for Excellence in Plant Energy Initiatives for energy conservation both vegetation. The costs are covered by reserves put aside for 200 km from the Pogo Mine, in particular 13 indigenous Management inside and outside mines: improved unit Hishikari Mine Dept. the purpose of mine pollution control in line with Japanese communities within the Tanana River basin, and gathering (Director-General of the Kyushu Bureau of February 28, 2014 energy consumption by 9.7%, and reduced law. The Pogo Mine in the United States falls under Alaskan their opinions. Economy, Trade and Industry) peak power usage by 12.5% state law, which requires sites to be covered in soil and Communication with local citizens has continued on a Young Driver Safety Club Tochigi Plant Initiatives for raising road safety awareness, revegetated after all mine facilities have been removed. The regular basis even after the commencement of operations. Award for Enterprise Excellence March 4, 2014 Sumitomo Metal Mining such as club members performing safety law stipulates the remedial programs required and their (Chief of Tochigi Police, Chairman of the During 2013, three sessions were held to disclose Tochigi Prefectural Association of Driving Siporex Co., Ltd. patrols and holding in-house traffic safety extent, the water quality parameters to be monitored, and the information to local residents and other stakeholders, and Safety Managers) classes costs required for remedial work and revegetation. we provided briefings on operations. So far, there have been SMM Group employees who used to work at the Besshi no pending issues resulting from complaints from Copper Mine and other Japanese mines that are now closed indigenous communities in the area surrounding the Pogo have been transferred to other workplaces or given Mine or other mines, smelters and refineries in which the assistance in finding new jobs. SMM Group has more than a 50% interest.

39 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 40 Contribution to Society and Local Communities Relations with Society

■ Reserves for Mine Closures Impact on Local Economies Social Contribution Activities Major Donations in FY2013 At business facilities where SMM Group activities have a Mine Reserve name Reserves (2013) The SMM Group carries out a wide range of social considerable impact on the local economy we contribute to Mine pollution contribution activities in Japan and overseas. The Corporate Support for areas in Japan and overseas struck by the community in a variety of ways such as through Hishikari Mine control reserve ¥19.22 million Citizenship Subcommittee within the CSR Committee has disaster considerations regarding supplier selection and been deliberating on specific social contribution measures • Contribution for typhoon-damaged Izu-Oshima employment. Pogo Mine Reclamation Bond US$57.10 million* suitable for SMM, which is aiming to become “a company in Island For example, the Pogo Mine procures materials and which employees are proud to work along with the company • Contribution for typhoon damage in the Philippines equipment from some 247 suppliers in Alaska, and the total * Total reserves for the entire project. The burden of costs, when they actually on social contribution activities rooted in the area,” as incur, will be divided among companies according to their participating • Contribution collected by employees for typhoon value of those transactions is around US$72 million a year. expressed in the Vision for 2020. interest. damage in the Philippines Efforts have been made to employ local Alaskans, and now Initiatives centering on the four areas below were 69% of the approximate 300 employees live in Alaska. Our implemented in each location during 2013: • Contribution for earthquake damage in Sichuan Province, China other efforts have included providing ongoing financial In the Philippines, we are required to submit a closure (1) Support for personnel training and infrastructure assistance to the city of Delta Junction, the closest maintenance in local communities and cleanup plan, not only for closure of the mine, Support for the areas struck by the Great East Japan municipality to the mine, and making donations to the (2) Restoration and reconstruction support after but also for the refinery and mineral processing plant Earthquake University of Alaska Fairbanks. devastating disasters in Japan and overseas at the Coral Bay Nickel Corporation (CBNC). We are • Contribution to the Iwate Learning Hope Fund At CBNC in the Philippines, efforts have been made to (3) Support in the fields of the environment, academia also required to put aside funds needed for the • Contribution to the Great East Japan Earthquake employ locals from Bataraza, achieving a ratio of 57%. At and culture closure of any related workplaces. The total cost Miyagi Children’s Education Fund THPAL, which commenced operations in October 2013 also (4) Support for employee activities that contribute to according to the closure plan submitted by CBNC to in the Philippines, efforts have been made to employ locals society • Contribution to the Great East Japan Earthquake from Claver, who now account for 44% of the workforce. In the Department of Environmental and Natural Fukushima Children’s Fund each of these communities, we are continuing to provide Resources (DENR) is 110 million pesos, and funds • Donation of rice produced in Kyowa, Hokkaido support such as for school education, health care, hygiene will be set aside every year for an eight-year period • In-house activities, including a seminar on the and better living conditions. starting in 2012. conditions in affected areas and a spot sale of We are also providing assistance via SDMP* to help produce from Miyagi Prefecture Starting/Ceasing Operations local residents make a living (such as in the farming Academic support When starting up business in a region—or withdrawing from and fishing industries) even after closure of a facility. • Support and contribution to universities, support for it—meetings are held by the Management Committee and the protection of cultural assets, etc. others involved to determine how to respond to political and * SDMP: Social Development Management Program, conducted by a economic risks, risks to humans, and other risks relating, for company for the sake of the welfare of residents living in an area of • Contribution to the Japanese Foundation for Cancer its business activities example, to region-specific diseases, employment, labor Research disputes and other labor issues, religious constraints, and border disputes. If a crisis occurs, we clearly identify the Nature conservation • Contribution to the Keidanren Nature Conservation causes and take swift action. The SMM Group requires Involvement with Local Communities serious matters at any business facility, subsidiary, or affiliate Fund to be discussed in a timely fashion. Agreements are entered into communities in line with the law at the Pogo Mine and other mines, smelters and refineries in which the SMM Group has more than a 50% interest. Mine Closure Plans In 2013, budget briefings were held in April and Examples of Social Recognition Taking into consideration the treatment procedures that must September. be carried out once mining is finished, the SMM Group The ComRel (Community Relations) section was Some of the awards received by the SMM Group in FY2013. makes an effort to minimize the impact on the environment established under the CBNC General Affairs Department. By during the development stage. When actually closing a mine, means of the Information Education Campaign ( ) activity, IEC Recognition (Awarding party) Date Recipients Award received for procedures are advanced in a proper manner in keeping this section is regularly sharing information with the 11 with the SMM Group Corporate Philosophy and in impact barangays in the Rio Tuba area. Once every two Shigeo Hata Involvement in the development of mines Sumiko Resources for 34 years, and efforts to train workers, accordance with laws and regulations. At mines in which Medal with Yellow Ribbon (Cabinet Office, November 3, 2013 months, CBNC top management holds a discussion with the Government of Japan) Exploration & Development improve productivity and create “safety SMM has more than a 50% interest, we draw up suitable authorities in Rio Tuba in order to exchange ideas with the Co., Ltd. first” workplaces plans once closure of the mine is foreseeable. Closure local communities, which passes on an understanding of our Ranked No. 1 in the Iron/Non-ferrous Metals Award for Excellence in Corporate Disclosure Sumitomo Metal Mining formalities and management are carried out according to the activities and helps to create a stabilized business. October 11, 2013 Category as evaluated by securities (Securities Analysts Association of Japan) Co., Ltd. laws of the country in question. As part of the process of obtaining a permit for the Pogo analysts (three consecutive years) Future environmental considerations at the Hishikari Mine Mine, “G2G consultations” were undertaken by the Alaska Best IR Award Sumitomo Metal Mining Excellence in investor relations activities include shaping spoil heaps into slopes, covering them with state government. This involved providing explanations (Japan Investor Relations Association (JIRA)) December 16, 2013 Co., Ltd. (second award, first time in two years) soil if necessary, and then spraying with seed to create about the project to communities located within a radius of FY2013 Award for Excellence in Plant Energy Initiatives for energy conservation both vegetation. The costs are covered by reserves put aside for 200 km from the Pogo Mine, in particular 13 indigenous Management inside and outside mines: improved unit Hishikari Mine Dept. the purpose of mine pollution control in line with Japanese communities within the Tanana River basin, and gathering (Director-General of the Kyushu Bureau of February 28, 2014 energy consumption by 9.7%, and reduced law. The Pogo Mine in the United States falls under Alaskan their opinions. Economy, Trade and Industry) peak power usage by 12.5% state law, which requires sites to be covered in soil and Communication with local citizens has continued on a Young Driver Safety Club Tochigi Plant Initiatives for raising road safety awareness, revegetated after all mine facilities have been removed. The regular basis even after the commencement of operations. Award for Enterprise Excellence March 4, 2014 Sumitomo Metal Mining such as club members performing safety law stipulates the remedial programs required and their (Chief of Tochigi Police, Chairman of the During 2013, three sessions were held to disclose Tochigi Prefectural Association of Driving Siporex Co., Ltd. patrols and holding in-house traffic safety extent, the water quality parameters to be monitored, and the information to local residents and other stakeholders, and Safety Managers) classes costs required for remedial work and revegetation. we provided briefings on operations. So far, there have been SMM Group employees who used to work at the Besshi no pending issues resulting from complaints from Copper Mine and other Japanese mines that are now closed indigenous communities in the area surrounding the Pogo have been transferred to other workplaces or given Mine or other mines, smelters and refineries in which the assistance in finding new jobs. SMM Group has more than a 50% interest.

39 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 40 Contribution to Society and Local Communities Relations with Society

Main Organizations in Which SMM Has Membership ICMM Position Statements The EITI Principles Organization Responsibilities of SMM officers and employees Initiatives relating to public policy 1. We share a belief that the prudent use of natural Participation in committees on: industrial technology, risk As a unified business organization with the goal of making ICMM has adopted the following position management, Canada, environment and safety, oceanic improvements to the autonomous growth of the domestic economy resource wealth should be an important engine for Nippon Keidanren resources, international cooperation, China, South Asia, and to public life, we act reliably and swiftly after gathering opinions statements to complement the 10 Principles. SMM sustainable economic growth that contributes to Japan-Myanmar economic relations and Japan-Brazil from the business world with regards to various internal and external follows through on these position statements. sustainable development and poverty reduction, economic relations economic challenges Note: The position statements below are summarized versions of but if not managed properly, can create negative Director; participation in committees relating to planning statements issued by ICMM economic and social impacts. and coordination, energy, overseas development, Submission of mining industry policy demand to relevant environmental management, customs duties, funds, government agency regarding electricity fee issues, taxation, 1. Transparency of Mineral Revenues 2. We affirm that management of natural resource Japan Mining Industry supply and demand, taxation, exploration and resource development, smelting and recycling technology, mine Support for the Extractive Industries wealth for the benefit of a country’s citizens is in the Association safety, and development of employee training. Members to be sent development, mining reserves (chairman and deputy Transparency Initiative (EITI) domain of sovereign governments to be exercised chairman), sulfide ore and sulfuric acid, and the special to government sponsored investigative committees to present industry viewpoint. in the interests of their national development. committee for depletion allowance measures 2. Policy on Climate Change 3. We recognise that the benefits of resource Communicating policy and information from the Manufacturing Work to reduce greenhouse gas emissions The Sulphuric Acid One director; participation in Operations Committee and Industries Bureau of the Ministry of Economy, Trade and Industry to extraction occur as revenue streams over many Association of Japan Technical Committee member companies and compiling and presenting requests from 3. Mercury Risk Management years and can be highly price dependent. member companies Carry out responsible management of mercury 4. We recognise that a public understanding of • Environment 4. Mining and Protected Areas government revenues and expenditure over time Initiatives for biodiversity, global warming countermeasures and Undertake not to explore or mine in World could help public debate and inform choice of water management • Health and safety appropriate and realistic options for sustainable Participation and promotion of activities in each of the Heritage properties Enhanced performance through use of benchmarks and sharing development. following committees: of health and safety information International Council Environment and Climate Change, 5. Mining and Indigenous Peoples • Materials stewardship 5. We underline the importance of transparency by on Mining and Metals Health and Safety, Materials Stewardship, Respect indigenous peoples and their rights Initiatives for science-based chemical substance management governments and companies in the extractive (ICMM) Social and Economic Development and supply chain management industries and the need to enhance public financial • Society and economy 6. Mining: Partnerships for Development Promotion of EITI activities, preparation of various toolkits and Enhance mining’s social and economic management and accountability. guidelines, and promotion of best practice contribution 6. We recognise that achievement of greater Japan Society of Director; participation in Target Group and Compound Hearings with government in relation to policy (rare metal reserve transparency must be set in the context of respect Newer Metals Semiconductor Group issues, etc.) for contracts and laws.

Japan Electronics and 7. We recognise the enhanced environment for Information Technology Participation in Electronic Components Board and Collection of various statistics, and participation in reviews of domestic and foreign direct investment that Industries Association Electronic Materials Committee regulations, environmental measures and other issues financial transparency may bring. (JEITA) Declaration of Support for the EITI 8. We believe in the principle and practice of Battery Association of The Extractive Industries Transparency Initiative (EITI)* is an Associate member accountability by government to all citizens for the Japan organization aiming to promote social and economic development in countries which produce mineral resources stewardship of revenue streams and public by ensuring that money, such as taxes paid to governments expenditure. Involvement with the International Community The 10 Principles of the ICMM from corporations that extract mineral resources, flows back 9. We are committed to encouraging high standards into those countries or regions. of transparency and accountability in public life, ICMM Membership Principle 1: Implement and maintain ethical business practices It is sometimes the case in resource-rich countries, where and sound systems of corporate governance. government operations and in business. The International Council on Mining and Metals (ICMM) aims societal and economic development is often stagnant, that Integrate sustainable development considerations 10. We believe that a broadly consistent and workable to provide leadership on sustainable development initiatives Principle 2: revenues generated by resources are not invested effectively within the corporate decision-making process. approach to the disclosure of payments and for the mining and metal refining industries. in the country’s development, leading instead to problems Uphold fundamental human rights and respect The SMM Group reflects the ICMM’s 10 Principles in its Principle 3: such as poverty, conflict and corruption. revenues is required, which is simple to undertake cultures, customs and values in dealings with These are global issues, and advanced nations and and to use. CSR Policy and issues reports in line with the GRI guidelines, employees and others who are affected by our corporations are being called upon to play a part in resolving as is required of all member companies. As a corporate activities. 11. We believe that payments’ disclosure in a given them. SMM agrees with the objectives of the EITI and member, we also carry out a variety of initiatives, including Implement risk management strategies based on country should involve all extractive industry Principle 4: supports its activities. As of October 2013, the Philippines, ensuring conformance with position statements adopted for valid data and sound science. companies operating in that country. the Solomon Islands and Indonesia are the only candidate the 10 Principles. Seek continual improvement of our health and Principle 5: countries in which SMM is conducting business. 12. In seeking solutions, we believe that all SMM’s three core businesses are mineral resources, safety performance. stakeholders have important and relevant smelting and refining, and materials. In the mineral Seek continual improvement of our environmental Principle 6: * Extractive Industries Transparency Initiative homepage: http://eiti.org/ resources and smelting and refining businesses, our aim is performance. contributions to make—including governments and to become a world leader in the non-ferrous metals industry, their agencies, extractive industry companies, Principle 7: Contribute to conservation of biodiversity and and so we are pushing ahead with mineral exploration integrated approaches to land use planning. service companies, multilateral organisations, activities overseas and bolstering investment in existing financial organisations, investors, and Principle 8: Facilitate and encourage responsible product mines. Seeking greater opportunities for operating on the design, use, re-use, recycling and disposal of our non-governmental organisations. global stage, SMM hopes to contribute to the development products. of the mining and metal refining industries in harmony with Principle 9: Contribute to the social, economic and institutional society. development of the communities in which we operate. Principle 10: Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

41 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 42 Contribution to Society and Local Communities Relations with Society

Main Organizations in Which SMM Has Membership ICMM Position Statements The EITI Principles Organization Responsibilities of SMM officers and employees Initiatives relating to public policy 1. We share a belief that the prudent use of natural Participation in committees on: industrial technology, risk As a unified business organization with the goal of making ICMM has adopted the following position management, Canada, environment and safety, oceanic improvements to the autonomous growth of the domestic economy resource wealth should be an important engine for Nippon Keidanren resources, international cooperation, China, South Asia, and to public life, we act reliably and swiftly after gathering opinions statements to complement the 10 Principles. SMM sustainable economic growth that contributes to Japan-Myanmar economic relations and Japan-Brazil from the business world with regards to various internal and external follows through on these position statements. sustainable development and poverty reduction, economic relations economic challenges Note: The position statements below are summarized versions of but if not managed properly, can create negative Director; participation in committees relating to planning statements issued by ICMM economic and social impacts. and coordination, energy, overseas development, Submission of mining industry policy demand to relevant environmental management, customs duties, funds, government agency regarding electricity fee issues, taxation, 1. Transparency of Mineral Revenues 2. We affirm that management of natural resource Japan Mining Industry supply and demand, taxation, exploration and resource development, smelting and recycling technology, mine Support for the Extractive Industries wealth for the benefit of a country’s citizens is in the Association safety, and development of employee training. Members to be sent development, mining reserves (chairman and deputy Transparency Initiative (EITI) domain of sovereign governments to be exercised chairman), sulfide ore and sulfuric acid, and the special to government sponsored investigative committees to present industry viewpoint. in the interests of their national development. committee for depletion allowance measures 2. Policy on Climate Change 3. We recognise that the benefits of resource Communicating policy and information from the Manufacturing Work to reduce greenhouse gas emissions The Sulphuric Acid One director; participation in Operations Committee and Industries Bureau of the Ministry of Economy, Trade and Industry to extraction occur as revenue streams over many Association of Japan Technical Committee member companies and compiling and presenting requests from 3. Mercury Risk Management years and can be highly price dependent. member companies Carry out responsible management of mercury 4. We recognise that a public understanding of • Environment 4. Mining and Protected Areas government revenues and expenditure over time Initiatives for biodiversity, global warming countermeasures and Undertake not to explore or mine in World could help public debate and inform choice of water management • Health and safety appropriate and realistic options for sustainable Participation and promotion of activities in each of the Heritage properties Enhanced performance through use of benchmarks and sharing development. following committees: of health and safety information International Council Environment and Climate Change, 5. Mining and Indigenous Peoples • Materials stewardship 5. We underline the importance of transparency by on Mining and Metals Health and Safety, Materials Stewardship, Respect indigenous peoples and their rights Initiatives for science-based chemical substance management governments and companies in the extractive (ICMM) Social and Economic Development and supply chain management industries and the need to enhance public financial • Society and economy 6. Mining: Partnerships for Development Promotion of EITI activities, preparation of various toolkits and Enhance mining’s social and economic management and accountability. guidelines, and promotion of best practice contribution 6. We recognise that achievement of greater Japan Society of Director; participation in Target Group and Compound Hearings with government in relation to policy (rare metal reserve transparency must be set in the context of respect Newer Metals Semiconductor Group issues, etc.) for contracts and laws.

Japan Electronics and 7. We recognise the enhanced environment for Information Technology Participation in Electronic Components Board and Collection of various statistics, and participation in reviews of domestic and foreign direct investment that Industries Association Electronic Materials Committee regulations, environmental measures and other issues financial transparency may bring. (JEITA) Declaration of Support for the EITI 8. We believe in the principle and practice of Battery Association of The Extractive Industries Transparency Initiative (EITI)* is an Associate member accountability by government to all citizens for the Japan organization aiming to promote social and economic development in countries which produce mineral resources stewardship of revenue streams and public by ensuring that money, such as taxes paid to governments expenditure. Involvement with the International Community The 10 Principles of the ICMM from corporations that extract mineral resources, flows back 9. We are committed to encouraging high standards into those countries or regions. of transparency and accountability in public life, ICMM Membership Principle 1: Implement and maintain ethical business practices It is sometimes the case in resource-rich countries, where and sound systems of corporate governance. government operations and in business. The International Council on Mining and Metals (ICMM) aims societal and economic development is often stagnant, that Integrate sustainable development considerations 10. We believe that a broadly consistent and workable to provide leadership on sustainable development initiatives Principle 2: revenues generated by resources are not invested effectively within the corporate decision-making process. approach to the disclosure of payments and for the mining and metal refining industries. in the country’s development, leading instead to problems Uphold fundamental human rights and respect The SMM Group reflects the ICMM’s 10 Principles in its Principle 3: such as poverty, conflict and corruption. revenues is required, which is simple to undertake cultures, customs and values in dealings with These are global issues, and advanced nations and and to use. CSR Policy and issues reports in line with the GRI guidelines, employees and others who are affected by our corporations are being called upon to play a part in resolving as is required of all member companies. As a corporate activities. 11. We believe that payments’ disclosure in a given them. SMM agrees with the objectives of the EITI and member, we also carry out a variety of initiatives, including Implement risk management strategies based on country should involve all extractive industry Principle 4: supports its activities. As of October 2013, the Philippines, ensuring conformance with position statements adopted for valid data and sound science. companies operating in that country. the Solomon Islands and Indonesia are the only candidate the 10 Principles. Seek continual improvement of our health and Principle 5: countries in which SMM is conducting business. 12. In seeking solutions, we believe that all SMM’s three core businesses are mineral resources, safety performance. stakeholders have important and relevant smelting and refining, and materials. In the mineral Seek continual improvement of our environmental Principle 6: * Extractive Industries Transparency Initiative homepage: http://eiti.org/ resources and smelting and refining businesses, our aim is performance. contributions to make—including governments and to become a world leader in the non-ferrous metals industry, their agencies, extractive industry companies, Principle 7: Contribute to conservation of biodiversity and and so we are pushing ahead with mineral exploration integrated approaches to land use planning. service companies, multilateral organisations, activities overseas and bolstering investment in existing financial organisations, investors, and Principle 8: Facilitate and encourage responsible product mines. Seeking greater opportunities for operating on the design, use, re-use, recycling and disposal of our non-governmental organisations. global stage, SMM hopes to contribute to the development products. of the mining and metal refining industries in harmony with Principle 9: Contribute to the social, economic and institutional society. development of the communities in which we operate. Principle 10: Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

41 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 42 Contribution to Society Initiatives in the Six Key CSR Areas and Local Communities Contribution to Society and Local Communities

Contributions to Maintaining and Developing Tenryu River System Environmental Picnic Presentation of President’s Letter of Thanks for CSR Endeavors the Living Conditions, Culture and Traditions of Local Communities The following people were presented with Letters of Thanks for CSR endeavors by the President at the ceremony held on June 19, 2014. On-demand Lesson in Peru Recipients CSR activity recognized

Kazutaka Kikuchi Kikuchi has been conducting volunteer activities all the while since July 2011 immediately Finance & Accounting Dept. following the Great East Japan Earthquake in areas in Miyagi Prefecture, especially in Sendai City and Minamisanriku Town. Starting with the removal of rubble and the digging out of debris flow immediately following the earthquake, he has been involved in more than 98 activities in total, including restoring rice and vegetable fields, supporting the aquaculture industry in coastal areas, and a visit to a makeshift housing complex by a Hyottoko (comically distorted masks) traditional performing arts group from Hyuga City.

Akira Nagata Having successively held a number of key posts in Isa City, such as chairman of PTAs at Hishikari Mine Dept., elementary, junior high and senior high schools, Nagata has also been involved in youth Mineral Resources Div. guidance activities and blue light patrol activities commissioned by the Isa Police Station, as  Participants picking up litter as they walk along the Tenryu River well as community activities to create places of recreation and relaxation where sports can be enjoyed by all generations, establishing a comprehensive community sports club. In 2012, in The Tenryu River System Environmental Picnic is organized recognition of these activities, Nagata was commended by Isa City for distinguished services by the Nagano Techno Foundation, and Shinko Co. Ltd. has in social education.  A talk on robotics at a community center in Peru been taking part since 2009. Every year, about 70 employees and their families walk along the Tenryu River, While on site exploring for minerals in a mountainous area Non-Ferrous Metals and In response to a mass diarrhea outbreak in 2011 near Coral Bay in the Philippines (147 which flows through the center of the town of Minowa, Materials Division, CBNC people complained of symptoms, 16 people died), CBNC and Rio Tuba Nickel Mining in Peru, we were asked by children from a nearby village to picking up litter as they chat, and experiencing the give a talk on Japan’s advanced science and technology. It Laurence Amores Corporation made a joint decision to introduce facilities for supplying potable water. This blessings of nature. Fe Madona Peralta division of the Community Relation Section was in charge of the installation work and for was a chance to visit the village community center and Initially starting out as an activity called “Creating a speak about Japan’s state-of-the-art robotics while mixing it Gomer Pasingco providing hygiene education to local residents. After the water intake facilities had been Society in Harmony with Nature,” its aim was for the Hamera Gabinete installed, education—such as on how to use the faucet, usage limits, cleaning and handling up with some video clips. Seeing such images for the first development of local industry and symbiosis with the Ernesto Llacuna malfunctions—and the careful installation measures—such as water quality testing—proved time, the children listened with great interest. natural environment, by getting participants to think about Briccio Abela effective, and the division drew praise from both local residents and the administration for In most cases, the community contribution wanted by the significance and importance of sorting garbage and Gerold Allen Argonoso “clean drink water which resulted in fewer sick people.” local residents is economic assistance, and it is normal for getting them to see the current state of the Tenryu River this to be given in the form of the provision of goods. firsthand. It has since developed into a major event with However, I believe that leaving as many intangible assets Takashi Hashikawa As chairman of the Niihama-City PTA Federation, Hashikawa rallied together the elementary 100 companies and 5,000 people participating from the NCA Project Dept. and junior high school PTAs in Niihama City, and recruited 48 junior high students from as possible leads to contributions to the local community in basin of the Tenryu River in southern Shinshu. the true sense of the word. Education is a notable example Materials Div. Niihama City to visit Rikuzentakata City in Iwate Prefecture for three nights and four days. In the first year, just a few volunteers from Shinko Co., Ltd. There, they participated in volunteer activities and a social event. A briefing session on the of such assets. That such a project was implemented at the participated as part of the team from the Minowa Town visit was held in September. Hashikawa also invited a total of 10 junior high students and request of the children themselves was also an unexpected Chamber of Commerce & Industry. There were also some elderly people affected by the disaster to come from Rikuzentakata City to Niihama City, joy for us. corporate teams comprised of participants from the same where a social event was held with a crowd of 60 volunteers from local elementary, junior high One child in the audience asked, “Why is it that Japanese workplace. and senior high schools, as well as from Ehime University and Matsuyama University. can do these things but we can’t?” I answered with hope, Being a company like ours, which manufactures printed “Not at all. Everyone is capable.” I hope to continue helping circuit boards and uses lots of water for cleaning at each to make this happen. process before emitting it into the Tenryu River, the SMM President, Yoshiaki Nakazato, Gave the Following Words following year, intending to actively preserve the of Congratulations to All the Recipients environment as part of our corporate responsibility, we Through your activities, you have contributed to society, and now began appealing to all employees to participate in the you have been recognized for having raised the social credibility event. By getting all employees of the SMM Group. I expect that your efforts will also serve as to take shared ownership of this model CSR activities for future employees. I hope that you will significance, the event has steadily continue your respective activities, personifying the spirit gradually taken root. of CSR activities.

Hiroshi Oowa Tomohito Fujinami Safety & Environment Control Dept., Administration Div. Sumitomo Metal Mining Peru S.A. Shinko Co., Ltd.  Recipients of the President’s Letters of Thanks for CSR Endeavors (front row)

My Way of Doing Good At the Nagoya Branch, we participate in cleanup activities in the city as a contribution to the community, although it is only once a year. Again this year, employees from SMM and group companies undertook cleanup activities on June 7 in the vicinity of the Nagoya TV Tower. These cleanup activities are conducted every year as a way for Sumitomo companies to embody their contribution to the community. Nagoya is famous for its intense heat in summer, and through these cleanup activities, I hope we can convey to our local stakeholders the burning passion we feel for the local community. Miyoko Ueda Nagoya Branch

43 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 44 Contribution to Society Initiatives in the Six Key CSR Areas and Local Communities Contribution to Society and Local Communities

Contributions to Maintaining and Developing Tenryu River System Environmental Picnic Presentation of President’s Letter of Thanks for CSR Endeavors the Living Conditions, Culture and Traditions of Local Communities The following people were presented with Letters of Thanks for CSR endeavors by the President at the ceremony held on June 19, 2014. On-demand Lesson in Peru Recipients CSR activity recognized

Kazutaka Kikuchi Kikuchi has been conducting volunteer activities all the while since July 2011 immediately Finance & Accounting Dept. following the Great East Japan Earthquake in areas in Miyagi Prefecture, especially in Sendai City and Minamisanriku Town. Starting with the removal of rubble and the digging out of debris flow immediately following the earthquake, he has been involved in more than 98 activities in total, including restoring rice and vegetable fields, supporting the aquaculture industry in coastal areas, and a visit to a makeshift housing complex by a Hyottoko (comically distorted masks) traditional performing arts group from Hyuga City.

Akira Nagata Having successively held a number of key posts in Isa City, such as chairman of PTAs at Hishikari Mine Dept., elementary, junior high and senior high schools, Nagata has also been involved in youth Mineral Resources Div. guidance activities and blue light patrol activities commissioned by the Isa Police Station, as  Participants picking up litter as they walk along the Tenryu River well as community activities to create places of recreation and relaxation where sports can be enjoyed by all generations, establishing a comprehensive community sports club. In 2012, in The Tenryu River System Environmental Picnic is organized recognition of these activities, Nagata was commended by Isa City for distinguished services by the Nagano Techno Foundation, and Shinko Co. Ltd. has in social education.  A talk on robotics at a community center in Peru been taking part since 2009. Every year, about 70 employees and their families walk along the Tenryu River, While on site exploring for minerals in a mountainous area Non-Ferrous Metals and In response to a mass diarrhea outbreak in 2011 near Coral Bay in the Philippines (147 which flows through the center of the town of Minowa, Materials Division, CBNC people complained of symptoms, 16 people died), CBNC and Rio Tuba Nickel Mining in Peru, we were asked by children from a nearby village to picking up litter as they chat, and experiencing the give a talk on Japan’s advanced science and technology. It Laurence Amores Corporation made a joint decision to introduce facilities for supplying potable water. This blessings of nature. Fe Madona Peralta division of the Community Relation Section was in charge of the installation work and for was a chance to visit the village community center and Initially starting out as an activity called “Creating a speak about Japan’s state-of-the-art robotics while mixing it Gomer Pasingco providing hygiene education to local residents. After the water intake facilities had been Society in Harmony with Nature,” its aim was for the Hamera Gabinete installed, education—such as on how to use the faucet, usage limits, cleaning and handling up with some video clips. Seeing such images for the first development of local industry and symbiosis with the Ernesto Llacuna malfunctions—and the careful installation measures—such as water quality testing—proved time, the children listened with great interest. natural environment, by getting participants to think about Briccio Abela effective, and the division drew praise from both local residents and the administration for In most cases, the community contribution wanted by the significance and importance of sorting garbage and Gerold Allen Argonoso “clean drink water which resulted in fewer sick people.” local residents is economic assistance, and it is normal for getting them to see the current state of the Tenryu River this to be given in the form of the provision of goods. firsthand. It has since developed into a major event with However, I believe that leaving as many intangible assets Takashi Hashikawa As chairman of the Niihama-City PTA Federation, Hashikawa rallied together the elementary 100 companies and 5,000 people participating from the NCA Project Dept. and junior high school PTAs in Niihama City, and recruited 48 junior high students from as possible leads to contributions to the local community in basin of the Tenryu River in southern Shinshu. the true sense of the word. Education is a notable example Materials Div. Niihama City to visit Rikuzentakata City in Iwate Prefecture for three nights and four days. In the first year, just a few volunteers from Shinko Co., Ltd. There, they participated in volunteer activities and a social event. A briefing session on the of such assets. That such a project was implemented at the participated as part of the team from the Minowa Town visit was held in September. Hashikawa also invited a total of 10 junior high students and request of the children themselves was also an unexpected Chamber of Commerce & Industry. There were also some elderly people affected by the disaster to come from Rikuzentakata City to Niihama City, joy for us. corporate teams comprised of participants from the same where a social event was held with a crowd of 60 volunteers from local elementary, junior high One child in the audience asked, “Why is it that Japanese workplace. and senior high schools, as well as from Ehime University and Matsuyama University. can do these things but we can’t?” I answered with hope, Being a company like ours, which manufactures printed “Not at all. Everyone is capable.” I hope to continue helping circuit boards and uses lots of water for cleaning at each to make this happen. process before emitting it into the Tenryu River, the SMM President, Yoshiaki Nakazato, Gave the Following Words following year, intending to actively preserve the of Congratulations to All the Recipients environment as part of our corporate responsibility, we Through your activities, you have contributed to society, and now began appealing to all employees to participate in the you have been recognized for having raised the social credibility event. By getting all employees of the SMM Group. I expect that your efforts will also serve as to take shared ownership of this model CSR activities for future employees. I hope that you will significance, the event has steadily continue your respective activities, personifying the spirit gradually taken root. of CSR activities.

Hiroshi Oowa Tomohito Fujinami Safety & Environment Control Dept., Administration Div. Sumitomo Metal Mining Peru S.A. Shinko Co., Ltd.  Recipients of the President’s Letters of Thanks for CSR Endeavors (front row)

My Way of My Way of Doing Good Doing Good When purchasing goods, I make it a point to select from Fairtrade* products. This is because I think that, if a At the Nagoya Branch, we participate in cleanup activities in the city as a contribution to the community, system can be established whereby producers can generate profits producing goods in their own countries, although it is only once a year. Again this year, employees from SMM and group companies undertook cleanup then they can become self-reliant and can get better living conditions. activities on June 7 in the vicinity of the Nagoya TV Tower. These cleanup activities are conducted every year as a way for Sumitomo companies to embody their contribution to the community. Nagoya is famous for its intense * Fairtrade: A movement that aims to improve living conditions and achieve self-reliance for producers and workers in vulnerable developing countries, by purchasing raw heat in summer, and through these cleanup activities, I hope we can convey to our local stakeholders the materials and products from those developing countries at a fair price on an ongoing basis burning passion we feel for the local community. Saori Tsumura Advanced MaterialsBusiness Unit, Materials Div. Miyoko Ueda Nagoya Branch

43 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 44 Initiatives in the Six Key CSR Areas Basic Approach

The SMM Group Corporate Philosophy states that, based on respect for all individuals and in recognition of each Respect for People and Human Rights person’s dignity and value, SMM is seeking to be a forward-minded and vibrant company. The CSR Policy declares that, in order to continue sound business activities, SMM shall respect human rights and shall try to be a company in which  A company that respects human rights and diversity of employees, develops employees with high awareness diverse human resources take active parts. 3-Year Business Plan integrates these ideas from the philosophy, policy and Vision of human rights, and gives equal opportunities depending on motivations to work and abilities of employees other statements into human resources strategy, through which we are pursuing a wide range of initiatives.  for 2020 A company that respects human rights of people who are affected by business activities of the SMM Group  A company that does not get involved in complicity with an entity that causes violations of human rights at areas with undeveloped social infrastructure and at troubled areas

Target FY2013 Achievements Challenges FY2014 Plan Implement human rights education throughout the ● Made SMM Group Human Rights Policy training materials. Also created ● Regular SMM Group Human Rights ● Conduct SMM Group Human Rights Policy training at subsidiaries in Japan and overseas entire SMM Group and make progress on English, Chinese (simplified and traditional) and Spanish versions for Policy training is needed at all during Human Rights Week in December training at overseas facilities and carried out through all areas. facilities and training effectiveness ● Continue to include human rights education in new employee training and establishing workplaces free of human rights ● Human rights education included in new employee training and has to be confirmed through newly-promoted section manager training, and particularly focus on human rights in infringements and cultivating employees with newly-promoted section manager training human rights due diligence training for human resources personnel strong human rights awareness ● Established the Committee for the Promotion of Respect for Human ● Hold regular meetings of the Committee for the Promotion of Respect for Human Rights Rights on April 1, 2013 1) To check, plan and enforce human rights education Conducted test runs of human rights due diligence1 processes at one 2) To inspect what is being done about human rights issues that arise business location each in Japan and overseas

1. Human rights due diligence: Careful investigation to check for human rights concerns prior to an undertaking

Promote understanding about diversity and make ● Failed to meet the statutory disabled employees ratio, but made posts ● While continuing efforts to make ● In order to attain the 2.0% statutory disabled employees ratio, continue to create progress on establishment of workplaces where that can be filled by disabled employees at Head Office in order to posts that can be filled by disabled workplaces that allow disabled employees to play active roles in a group increase employment of disabled people employees, SMM needs to ● Regarding support for women’s careers: diverse talents can work dynamically and with ● Conducted training on promoting women’s career development for accumulate know-how which SMM 1) Raising awareness motivation managers, supervisors and female employees. Regarding systems, does not currently possess about Conduct training for managers and supervisors, all the female employees, and female introduced such provisions as leave and return-to-work consultations systems, programs and other management track employees and reduced working hours systems through discussions with workers’ provisions for supporting disabled 2) System review unions. Also finished scheduled placement of female lockers and employees Study and implement female support measures appropriate to an Excellent Company of Japan showers and other infrastructure at business locations. 3) Infrastructure placement ● Accepted a Bridge Person2 from the Philippines. Accepted an intern Check if there are facilities which are a hindrance to women in their work from China, who has now been employed. 4) Others 2. Bridge Person: A program whereby local employees at overseas facilities work for a Vitalization of “Shining Employee” electronic bulletin board system, serializing of regular column limited period of time at a business location in Japan in Ibuki in-house magazine, and support for returning from maternity and child-care as a part of female career support measures and so on ● Continue accepting Bridge Persons and trainees from overseas facilities

Learn about and understand worldwide human ● Compliance seminar (Basic course) was conducted on September 17, ● Establishment of methods and ● Conduct compliance seminar (basic course and advanced course). Schedule special rights issues and how corporations impact human 2013. Compliance seminar (Advanced course) was conducted on parameters for human rights studies training for group company presidents in addition to existing compliance education. February 14, 2014. Overseas management training was conducted twice within the SMM Group with Training is scheduled for senior management of group companies, including officers rights. Implement necessary measures like on June 13-14, 2013, and January 24-25, 2014. Contents of the above consultant guidance originally employed at those companies. Continue to conduct for overseas awareness activities on an ongoing basis are changed in the annual revision. management training twice per year. ● Conducted test runs of human rights due diligence studies covering ● Regarding human rights due diligence, conduct studies for employees worldwide employees at Ome District Division and CBNC during this fiscal year. Conduct a test run of studies covering the supply chain. Prepare to start activities relating to studies covering local communities in 2015 by gathering required information this fiscal year.

Refuse to be complicit in human rights ● Decided on a basic approach to human rights due diligence covering ● At this time, we are not sure which ● With consultant guidance, look into specific measures regarding human rights studies infringements while appealing to parties within the the supply chain suppliers SMM can influence, and covering local community residents, are scheduled to be started in 2015. Until then, how SMM can influence them steadily carry out human rights training for employees at each business location. supply chain over which the SMM Group has influence to prevent human rights infringements

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 You have made training materials based on the SMM Group Human Rights Policy and carry out human rights Aiming to become a company worthy of being called “World Leader in the Non-ferrous Metals Industry” and an training, even at overseas facilities, and this is what a global corporation is supposed to be. You also conduct “Excellent Company of Japan,” we made steady progress again in FY2013 on basic initiatives in the form of compliance training, but I would like to see you build upon the human rights education programs you implement to human rights training at SMM Group companies in Japan and overseas to firmly instill knowledge about the foster awareness and a different mentality among employees in order to cultivate everyday human rights sensitivities SMM Group Human Rights Policy, as well as promotion of diversity at SMM, for example through hiring of that go beyond business settings. There are also some areas where the attainment level and progress of measures female management track employees and foreign exchange students, and creation of posts that can be filled by is somewhat hard to comprehend. disabled employees. We also stepped up our support for the careers of women through ongoing enhancements Establishing key performance indicators (KPI) with specific targets during the planning stage allows more objective to the various programs and implementation of training. As a result, we were selected for the second evaluation of attainment and progress, so I hope you will give this some thought. consecutive year as a Nadeshiko Brand for encouraging female employees to play active roles in the workplace. Furthermore, in FY2013 we devised and conducted test runs of a human rights due diligence system for within the In your view, what does society require in regard to respect for people and human rights? SMM Group. In FY2014, we will begin full-scale implementation of the system, conducting ongoing studies to In mineral resources and mining businesses, the biggest impacts on the environment and society occur within the determine the level of human rights awareness and to identify any related issues in the contexts of the SMM Group supply chain. For the nickel refining project in the Philippines, SMM provided assistance for the relocation of local Human Rights Policy and international standards, such as ISO 26000. Appropriate action will be taken as required. residents after first having gained their consent and understanding. In situations where human rights risks are Additionally in FY2014, we are looking into extending this system to encompass the entire supply chain and plan to extremely high, it is important that you develop systems and create opportunities for dialog that allow you to listen to implement due diligence studies, prioritizing suppliers according to their higher importance. the concerns and complaints of people in the community, and also that you devise preventive measures and response measures, such as implementing comprehensive human rights training when hiring security personnel, Response to Stakeholder Comments Kaori Kuroda ensuring the safety of employees, and maintaining a fully equipped working environment. In FY2013, you started Regarding KPI, while many aspects, such as human rights awareness and organizational culture, are hard to Hiroyuki Asai Executive Director, CSO Network Japan looking into human rights due diligence covering employees, and you have stated that this year you will fully extend quantify, the setting of clear targets is vital for explaining the progress of activities. We will respond Chairman, Human Rights & Human Resources the scope to the entire SMM Group, and will conduct a test run of human rights due diligence covering the supply appropriately through reference to the results of regular employee awareness surveys, for example relating to Development Subcommittee; Executive Officer; General Manager, Personnel Dept. chain. I am therefore looking forward to seeing your future initiatives. the degree of openness in workplaces and supervisors’ understanding of their employees.

45 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 46 Initiatives in the Six Key CSR Areas Basic Approach

The SMM Group Corporate Philosophy states that, based on respect for all individuals and in recognition of each Respect for People and Human Rights person’s dignity and value, SMM is seeking to be a forward-minded and vibrant company. The CSR Policy declares that, in order to continue sound business activities, SMM shall respect human rights and shall try to be a company in which  A company that respects human rights and diversity of employees, develops employees with high awareness diverse human resources take active parts. 3-Year Business Plan integrates these ideas from the philosophy, policy and Vision of human rights, and gives equal opportunities depending on motivations to work and abilities of employees other statements into human resources strategy, through which we are pursuing a wide range of initiatives.  for 2020 A company that respects human rights of people who are affected by business activities of the SMM Group  A company that does not get involved in complicity with an entity that causes violations of human rights at areas with undeveloped social infrastructure and at troubled areas

Target FY2013 Achievements Challenges FY2014 Plan Implement human rights education throughout the ● Made SMM Group Human Rights Policy training materials. Also created ● Regular SMM Group Human Rights ● Conduct SMM Group Human Rights Policy training at subsidiaries in Japan and overseas entire SMM Group and make progress on English, Chinese (simplified and traditional) and Spanish versions for Policy training is needed at all during Human Rights Week in December training at overseas facilities and carried out through all areas. facilities and training effectiveness ● Continue to include human rights education in new employee training and establishing workplaces free of human rights ● Human rights education included in new employee training and has to be confirmed through newly-promoted section manager training, and particularly focus on human rights in infringements and cultivating employees with newly-promoted section manager training human rights due diligence training for human resources personnel strong human rights awareness ● Established the Committee for the Promotion of Respect for Human ● Hold regular meetings of the Committee for the Promotion of Respect for Human Rights Rights on April 1, 2013 1) To check, plan and enforce human rights education Conducted test runs of human rights due diligence1 processes at one 2) To inspect what is being done about human rights issues that arise business location each in Japan and overseas

1. Human rights due diligence: Careful investigation to check for human rights concerns prior to an undertaking

Promote understanding about diversity and make ● Failed to meet the statutory disabled employees ratio, but made posts ● While continuing efforts to make ● In order to attain the 2.0% statutory disabled employees ratio, continue to create progress on establishment of workplaces where that can be filled by disabled employees at Head Office in order to posts that can be filled by disabled workplaces that allow disabled employees to play active roles in a group increase employment of disabled people employees, SMM needs to ● Regarding support for women’s careers: diverse talents can work dynamically and with ● Conducted training on promoting women’s career development for accumulate know-how which SMM 1) Raising awareness motivation managers, supervisors and female employees. Regarding systems, does not currently possess about Conduct training for managers and supervisors, all the female employees, and female introduced such provisions as leave and return-to-work consultations systems, programs and other management track employees and reduced working hours systems through discussions with workers’ provisions for supporting disabled 2) System review unions. Also finished scheduled placement of female lockers and employees Study and implement female support measures appropriate to an Excellent Company of Japan showers and other infrastructure at business locations. 3) Infrastructure placement ● Accepted a Bridge Person2 from the Philippines. Accepted an intern Check if there are facilities which are a hindrance to women in their work from China, who has now been employed. 4) Others 2. Bridge Person: A program whereby local employees at overseas facilities work for a Vitalization of “Shining Employee” electronic bulletin board system, serializing of regular column limited period of time at a business location in Japan in Ibuki in-house magazine, and support for returning from maternity and child-care as a part of female career support measures and so on ● Continue accepting Bridge Persons and trainees from overseas facilities

Learn about and understand worldwide human ● Compliance seminar (Basic course) was conducted on September 17, ● Establishment of methods and ● Conduct compliance seminar (basic course and advanced course). Schedule special rights issues and how corporations impact human 2013. Compliance seminar (Advanced course) was conducted on parameters for human rights studies training for group company presidents in addition to existing compliance education. February 14, 2014. Overseas management training was conducted twice within the SMM Group with Training is scheduled for senior management of group companies, including officers rights. Implement necessary measures like on June 13-14, 2013, and January 24-25, 2014. Contents of the above consultant guidance originally employed at those companies. Continue to conduct for overseas awareness activities on an ongoing basis are changed in the annual revision. management training twice per year. ● Conducted test runs of human rights due diligence studies covering ● Regarding human rights due diligence, conduct studies for employees worldwide employees at Ome District Division and CBNC during this fiscal year. Conduct a test run of studies covering the supply chain. Prepare to start activities relating to studies covering local communities in 2015 by gathering required information this fiscal year.

Refuse to be complicit in human rights ● Decided on a basic approach to human rights due diligence covering ● At this time, we are not sure which ● With consultant guidance, look into specific measures regarding human rights studies infringements while appealing to parties within the the supply chain suppliers SMM can influence, and covering local community residents, are scheduled to be started in 2015. Until then, how SMM can influence them steadily carry out human rights training for employees at each business location. supply chain over which the SMM Group has influence to prevent human rights infringements

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 You have made training materials based on the SMM Group Human Rights Policy and carry out human rights Aiming to become a company worthy of being called “World Leader in the Non-ferrous Metals Industry” and an training, even at overseas facilities, and this is what a global corporation is supposed to be. You also conduct “Excellent Company of Japan,” we made steady progress again in FY2013 on basic initiatives in the form of compliance training, but I would like to see you build upon the human rights education programs you implement to human rights training at SMM Group companies in Japan and overseas to firmly instill knowledge about the foster awareness and a different mentality among employees in order to cultivate everyday human rights sensitivities SMM Group Human Rights Policy, as well as promotion of diversity at SMM, for example through hiring of that go beyond business settings. There are also some areas where the attainment level and progress of measures female management track employees and foreign exchange students, and creation of posts that can be filled by is somewhat hard to comprehend. disabled employees. We also stepped up our support for the careers of women through ongoing enhancements Establishing key performance indicators (KPI) with specific targets during the planning stage allows more objective to the various programs and implementation of training. As a result, we were selected for the second evaluation of attainment and progress, so I hope you will give this some thought. consecutive year as a Nadeshiko Brand for encouraging female employees to play active roles in the workplace. Furthermore, in FY2013 we devised and conducted test runs of a human rights due diligence system for within the In your view, what does society require in regard to respect for people and human rights? SMM Group. In FY2014, we will begin full-scale implementation of the system, conducting ongoing studies to In mineral resources and mining businesses, the biggest impacts on the environment and society occur within the determine the level of human rights awareness and to identify any related issues in the contexts of the SMM Group supply chain. For the nickel refining project in the Philippines, SMM provided assistance for the relocation of local Human Rights Policy and international standards, such as ISO 26000. Appropriate action will be taken as required. residents after first having gained their consent and understanding. In situations where human rights risks are Additionally in FY2014, we are looking into extending this system to encompass the entire supply chain and plan to extremely high, it is important that you develop systems and create opportunities for dialog that allow you to listen to implement due diligence studies, prioritizing suppliers according to their higher importance. the concerns and complaints of people in the community, and also that you devise preventive measures and response measures, such as implementing comprehensive human rights training when hiring security personnel, Response to Stakeholder Comments Kaori Kuroda ensuring the safety of employees, and maintaining a fully equipped working environment. In FY2013, you started Regarding KPI, while many aspects, such as human rights awareness and organizational culture, are hard to Hiroyuki Asai Executive Director, CSO Network Japan looking into human rights due diligence covering employees, and you have stated that this year you will fully extend quantify, the setting of clear targets is vital for explaining the progress of activities. We will respond Chairman, Human Rights & Human Resources the scope to the entire SMM Group, and will conduct a test run of human rights due diligence covering the supply appropriately through reference to the results of regular employee awareness surveys, for example relating to Development Subcommittee; Executive Officer; General Manager, Personnel Dept. chain. I am therefore looking forward to seeing your future initiatives. the degree of openness in workplaces and supervisors’ understanding of their employees.

45 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 46 Respect for People and Human Rights Human Resources Development Human Rights Initiatives Initiatives

Human Rights Considerations When Making Next-generation Senior Management Development Prevention of Child Labor and Forced Labor Human Resources Development Program Bottom-up training of the entire workforce used to be the main Investments We gain knowledge of current conditions through questionnaires In order to realize the growth strategy put forward in its 3-Year objective, but in FY2008 we also launched a specialized program When making investments or equity contributions, the SMM Group sent out to group companies in Japan and overseas. No reports of Business Plan, the SMM Group has defined the human resources for training the next generation of senior managers. Section confirms the absence of intrinsic issues relating to human rights, child labor or forced labor were received during FY2013. it is looking for: people who see opportunity in change, perceive manager-level and general manager-level personnel with the such as discrimination, forced labor or child labor. Projects are issues correctly, and push forward with determination toward potential for a future senior management role at the company are finding solutions. also screened for risks during the decision making process using Artisanal and Small-scale Mining selected for the program, which is carried out over about six check sheets. Continued monitoring is conducted after the A framework structured around three components—on-the-job months and is designed to help them develop a senior manager’s investment or equity contribution, for example through board As of July 2014, there were no cases of work environment issues training (OJT), which is the primary component, self-development, perspective. meetings of the company invested in. If an issue arises, we will relating to artisanal and small-scale mining (ASM) in regions where and off-the-job training (OFF-JT)—has been put in place to Another program launched in FY2011 for newly promoted demand its resolution. In FY2013, although one of the five SMM operates. Nor did SMM have any programs for involvement develop such human resources. We also systematically carry out general manager-level personnel involves current officers in investment projects proposed at Management Meetings fell under in ASM. more specialized education through human resources charge at each workplace providing guidance and advice to the scope for checking, it was confirmed that no human rights development programs created for different job types. participants on a one-on-one basis to let them develop a sense for issues existed. Human Rights Seminars management, and participants themselves playing a leading role in actually addressing managerial issues faced by the company Human rights seminars are held regularly, the primary objectives and observing the results. Relocation of Local Citizens for being to deepen awareness of potential human rights issues in the Development workplace and to prevent them from occurring. These seminars Hishikari Mine and Pogo Mine are excavated using underground are held mainly for officers and managers at Head Office divisions, mining techniques involving the digging of drifts in the ground, while seminars at business divisions and district divisions target a Bridge Person Program broader range of employees. which means the impact on the surface is relatively low. Even so, To help bring about further globalization, SMM has there are occasions when we inevitably have to ask local citizens Having established the SMM Group Policy on Human Rights, we Newly promoted E-class employee training Newly promoted section manager training intend to enhance human rights education further. established the Bridge Person Program, whereby local to relocate to make way for development of the mine or the employees at overseas facilities work for a limited period of construction of associated facilities. On such occasions, we seek time at a business location in Japan. Objectives of the the approval and understanding of local citizens and offer Preventing Sexual Harassment program include stimulating awareness about diversity in alternative land. During the initial development phase of the To prevent sexual harassment, each business facility has a the host workplace (and in part, having employees become Hishikari Mine, we requested and carried out relocation of three dedicated consultation office and a designated sexual harassment familiar with using the English language), as well as households in total from 1983 to 1989. No citizens had to be prevention promotion officer. No incidents falling under the promoting greater understanding about the way operations relocated for development of the Pogo Mine. category of sexual harassment were reported during FY2013. are advanced overseas. For the Taganito Project, which started commercial production in Newly promoted general manager training Middle management program (MMP) The Personnel Department was the first to try out the October 2013, we asked 41 households in areas to be affected by program, hosting the head of the General Affairs the plant’s construction to relocate. A relocation plan was Enhancing Management of Human Rights Department at Sumitomo Metal Mining Philippine Holdings formulated in line with the World Bank’s Operational Directive on From FY2013 the SMM Group began studying the construction of Corporation (SMM-PH), Ledda Imbang, between October to Involuntary Resettlement. With the agreement of all citizens the Specific Human Resources Development a Group-wide human rights management program that Initiatives December 2013 as a Bridge Person to assist with tasks relocation was completed by December 2010. We are incorporates a human rights due diligence framework. We aim to relating to training of overseas facility senior management. implementing ongoing measures to support the sustainability of build a structured system to prevent and avoid complicity in either In particular, we focus on these human resources development While there was some initial hesitation within the host the relocated citizens’ lifestyles, such as technical assistance for direct or indirect violations of human rights, and to respond initiatives: department, by the end everyone had become so close to crop cultivation in their new places of settlement. appropriately to any concerns which come to light. Ledda that they were sad to see her go and gave her warm The system will apply to Group employees both in and outside (1) International employee development hugs on her departure. The experience also brought about Japan, persons in the supply chain who may be affected by the a change in mentality among employees of the department, (2) Next-generation senior management development Group’s activities, and local residents in the areas in which the with some resolving to start studying English again. Group conducts its business activities. We have established Through coordination between origin and host working groups for each of these target scopes and have begun We also intend to introduce new programs and review existing workplaces, the program will be actively used to advance studying the issues. Test runs covering employees were training programs as required. globalization at SMM. implemented in FY2013 and will be extended to the entire Group from FY2014. International Employee Development The globalization of business has created a need for human resources who can actively pursue SMM’s business strategy at overseas facilities and within markets for each of our main businesses. Acknowledging that the development of such human resources needs to start as early as possible, SMM implements a short-term A ceremony in Taganito for the signing of an agreement on relocation of citizens overseas training program whereby all new management track employees are seconded overseas for a two-month period. More than just an opportunity to polish up language skills, the program is designed to bring about general improvements to the employees’ ability to accommodate other cultures and their ability to act under their own initiative in an overseas setting. Training in business skills, which are perhaps one common Ledda (3rd from left in front row) with members of the Personnel Dept. language within a global business, is also readily incorporated into the different types of management training and training for employees promoted to new positions. International employee development is thus approached from a number of angles, not simply from the language aspect.

47 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 48 Respect for People and Human Rights Human Resources Development Human Rights Initiatives Initiatives

Human Rights Considerations When Making Next-generation Senior Management Development Prevention of Child Labor and Forced Labor Human Resources Development Program Bottom-up training of the entire workforce used to be the main Investments We gain knowledge of current conditions through questionnaires In order to realize the growth strategy put forward in its 3-Year objective, but in FY2008 we also launched a specialized program When making investments or equity contributions, the SMM Group sent out to group companies in Japan and overseas. No reports of Business Plan, the SMM Group has defined the human resources for training the next generation of senior managers. Section confirms the absence of intrinsic issues relating to human rights, child labor or forced labor were received during FY2013. it is looking for: people who see opportunity in change, perceive manager-level and general manager-level personnel with the such as discrimination, forced labor or child labor. Projects are issues correctly, and push forward with determination toward potential for a future senior management role at the company are finding solutions. also screened for risks during the decision making process using Artisanal and Small-scale Mining selected for the program, which is carried out over about six check sheets. Continued monitoring is conducted after the A framework structured around three components—on-the-job months and is designed to help them develop a senior manager’s investment or equity contribution, for example through board As of July 2014, there were no cases of work environment issues training (OJT), which is the primary component, self-development, perspective. meetings of the company invested in. If an issue arises, we will relating to artisanal and small-scale mining (ASM) in regions where and off-the-job training (OFF-JT)—has been put in place to Another program launched in FY2011 for newly promoted demand its resolution. In FY2013, although one of the five SMM operates. Nor did SMM have any programs for involvement develop such human resources. We also systematically carry out general manager-level personnel involves current officers in investment projects proposed at Management Meetings fell under in ASM. more specialized education through human resources charge at each workplace providing guidance and advice to the scope for checking, it was confirmed that no human rights development programs created for different job types. participants on a one-on-one basis to let them develop a sense for issues existed. Human Rights Seminars management, and participants themselves playing a leading role in actually addressing managerial issues faced by the company Human rights seminars are held regularly, the primary objectives and observing the results. Relocation of Local Citizens for being to deepen awareness of potential human rights issues in the Development workplace and to prevent them from occurring. These seminars Hishikari Mine and Pogo Mine are excavated using underground are held mainly for officers and managers at Head Office divisions, mining techniques involving the digging of drifts in the ground, while seminars at business divisions and district divisions target a Bridge Person Program broader range of employees. which means the impact on the surface is relatively low. Even so, To help bring about further globalization, SMM has there are occasions when we inevitably have to ask local citizens Having established the SMM Group Policy on Human Rights, we Newly promoted E-class employee training Newly promoted section manager training intend to enhance human rights education further. established the Bridge Person Program, whereby local to relocate to make way for development of the mine or the employees at overseas facilities work for a limited period of construction of associated facilities. On such occasions, we seek time at a business location in Japan. Objectives of the the approval and understanding of local citizens and offer Preventing Sexual Harassment program include stimulating awareness about diversity in alternative land. During the initial development phase of the To prevent sexual harassment, each business facility has a the host workplace (and in part, having employees become Hishikari Mine, we requested and carried out relocation of three dedicated consultation office and a designated sexual harassment familiar with using the English language), as well as households in total from 1983 to 1989. No citizens had to be prevention promotion officer. No incidents falling under the promoting greater understanding about the way operations relocated for development of the Pogo Mine. category of sexual harassment were reported during FY2013. are advanced overseas. For the Taganito Project, which started commercial production in Newly promoted general manager training Middle management program (MMP) The Personnel Department was the first to try out the October 2013, we asked 41 households in areas to be affected by program, hosting the head of the General Affairs the plant’s construction to relocate. A relocation plan was Enhancing Management of Human Rights Department at Sumitomo Metal Mining Philippine Holdings formulated in line with the World Bank’s Operational Directive on From FY2013 the SMM Group began studying the construction of Corporation (SMM-PH), Ledda Imbang, between October to Involuntary Resettlement. With the agreement of all citizens the Specific Human Resources Development a Group-wide human rights management program that Initiatives December 2013 as a Bridge Person to assist with tasks relocation was completed by December 2010. We are incorporates a human rights due diligence framework. We aim to relating to training of overseas facility senior management. implementing ongoing measures to support the sustainability of build a structured system to prevent and avoid complicity in either In particular, we focus on these human resources development While there was some initial hesitation within the host the relocated citizens’ lifestyles, such as technical assistance for direct or indirect violations of human rights, and to respond initiatives: department, by the end everyone had become so close to crop cultivation in their new places of settlement. appropriately to any concerns which come to light. Ledda that they were sad to see her go and gave her warm The system will apply to Group employees both in and outside (1) International employee development hugs on her departure. The experience also brought about Japan, persons in the supply chain who may be affected by the a change in mentality among employees of the department, (2) Next-generation senior management development Group’s activities, and local residents in the areas in which the with some resolving to start studying English again. Group conducts its business activities. We have established Through coordination between origin and host working groups for each of these target scopes and have begun We also intend to introduce new programs and review existing workplaces, the program will be actively used to advance studying the issues. Test runs covering employees were training programs as required. globalization at SMM. implemented in FY2013 and will be extended to the entire Group from FY2014. International Employee Development The globalization of business has created a need for human resources who can actively pursue SMM’s business strategy at overseas facilities and within markets for each of our main businesses. Acknowledging that the development of such human resources needs to start as early as possible, SMM implements a short-term A ceremony in Taganito for the signing of an agreement on relocation of citizens overseas training program whereby all new management track employees are seconded overseas for a two-month period. More than just an opportunity to polish up language skills, the program is designed to bring about general improvements to the employees’ ability to accommodate other cultures and their ability to act under their own initiative in an overseas setting. Training in business skills, which are perhaps one common Ledda (3rd from left in front row) with members of the Personnel Dept. language within a global business, is also readily incorporated into the different types of management training and training for employees promoted to new positions. International employee development is thus approached from a number of angles, not simply from the language aspect.

47 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 48 Respect for People and Human Rights People and Initiatives Relating to Employee Diversity Human Rights-related Data

Working Environments Favorable to Women Working with the Disabled A full-scale effort to create working environments favorable to SMM has so far been implementing an action plan aimed at SMM Group Policy on Human Rights women got underway in July 2012 with the establishment of the employing people with disabilities who are able to work at an The SMM Group’s policy on human rights, in accordance with the SMM Group Corporate Philosophy and the SMM Group Code Female Activation Support Group within the Personnel existing workplace. But in order to realize our CSR Policy and of Conduct, has been established as follows. Department. The aim of the group’s activities is to develop SMM respond to revisions to the statutory disabled employees ratio, we 1. The SMM Group will comply with domestic laws and international standards relating to human rights and encourage persons within into a company where ambitious female employees feel motivated additionally started on creating workplaces that are adapted to the the Group, as well as outside parties over which the Group has influence, to work toward the realization of a society without human and are able to work dynamically, gaining a sense of personal characteristics of people with disabilities, complementing our rights infringements. growth through their jobs while demonstrating their full potential. initiatives to date. This led to the employment of one intellectually 2. The SMM Group will not allow harassment or other incidents of a discriminatory nature within the Group and will make efforts to Initiatives are undertaken in line with this policy under the following disabled person in FY2013. prevent such incidents from occurring among outside parties over which the Group has influence. three main categories and made known throughout the company. SMM’s average disabled employee ratio for FY2013 came to 3. The SMM Group will not engage in child labor or forced labor and will make efforts to prevent child labor or forced labor from 1) Promotion of awareness only 1.84%, but we started accepting trainees from special occurring among outside parties over which the Group has influence. 2) Review of systems schools and will now pursue activities with an eye to regular hiring 3) Development of infrastructure of new graduates. At the same time, we will work to create 4. The SMM Group will show other considerations to human rights in addition to items 1-3 above within the Group and in relationships In FY 2013, training for managers and supervisors and for all workplaces that can take on people with disabilities, while with outside parties over which the Group has influence. female employees was held on 22 occasions, primarily at directly promoting awareness about the intellectually disabled and 5. The SMM Group will establish appropriate measures and procedures for responding to human rights problems if they should occur. controlled workplaces. In FY2014, follow-up training to the above advancing education about protecting the human rights of the 6. The SMM Group will identify and stay aware of the current and changing state of human rights in the world, as well as the impact of will be held, and related content will be added to training at a disabled. corporations in the area of human rights, and carry out awareness-raising activities and other necessary measures on an ongoing number of levels, such as training for management, human basis. resources personnel and female management track employees. Support for Veteran Employees This is because support for women’s careers has to be pursued with all individuals understanding that it is an extension of efforts Since revisions were made to SMM’s manager re-employment ■ FY2013 Total Annual Hours of Education (hours) ■ Disabled Employee Ratio Transition to enhance the system in FY2013, we have rehired all employees over the age of (SMM non-consolidated) General Section Regular corporate 60 who wished to remain employed. With an increasing number of Officers managers managers employees Other Total (%) people making use of the system, we have now started reviewing Statutory ratio competitiveness of SMM revised the SMM Group and suitable levels of treatment and systems that can contribute to non- 171 1,850 7,293 35,066 738 45,118 2.0 motivational improvements. consolidated because it is 1.89 1.88 paramount that they Consolidated 1.9 subsidiaries 364 884 2,409 13,428 2,761 19,846 understand it is the Initiatives Relating to Locally-hired in Japan 1.86 first step in 1.8 Employees at Overseas Affiliates Consolidated Statutory ratio 1.84 embracing diversity. subsidiaries 739 151 3,326 43,471 2,706 50,393 1.79 1.7  Consultation for an employee returning to work The SMM Group clarifies recruitment processes for each overseas overseas facility while adhering strictly to laws and ordinances of the Annual hours respective regions. Fairness in job appraisal, including of education 10.6 12.7 12.6 4.1 11.4 1.6 Systems mainly for providing support to employees returning to per employee work after maternity and childcare leave were reviewed between promotions, is also ensured. Actual conditions are periodically confirmed through the * Figures are limited to education/training organized by personnel and general affairs divisions 1.5 2013 and 2014, with revisions notified via the in-house bulletin and FY2009 FY2010 FY2011 FY2012 FY2013 electronic bulletin boards implementation of Group-wide questionnaires. average average average average average · Standardized consultations prior to taking maternity leave and ■ Human Resources Development Program (SMM Employees) prior to returning to work Initiatives for Enhancing Work-life Balance · Added childcare-related reasons as grounds for staggered Self- working hours A satisfying lifestyle leads to satisfaction at work, too. Based on OJT development OFF-JT this belief, SMM is making efforts to enhance the work-life balance · Revised standards for selecting employees who take childcare Self- Head Office OJT Outside International training leave as candidates for promotion of employees. development employee (university Rank-based training Specialized education placement Other program assistance graduate) education · Established special hourly childcare leave Efforts include strengthening, and promoting the use of, various · Revised provisions for use of company housing systems. In addition to restricting long working hours and encouraging employees to take paid leave, we have enhanced · Enabled women to work under their maiden names Officers the reduced working hour system available during child care and These systems allow employees who both work and raise General manager established a new return-to-work system. follow-up training Executive children, and employees working with them, to think about and management program We are also directing energy into enhancing the child-care leave General manager choose a suitable working style. second-year training

system, elderly and nursing care systems, and our response to the General Managerial

Also during FY2013, establishment of female lockers, showers managers Newly promoted general issue study groups and toilets progressed at four SMM-controlled plants and business Japanese Law for Measures to Support the Development of the manager training Next Generation. locations, and reports on completion of infrastructure development Middle management were received from group companies, too. Establishing such In advancing these efforts, we make full use of labor- Newly promoted section program infrastructure creates the right environment for expanding the management councils for surveying current conditions and manager training Management Section basic course responsibilities of women in the workplace. drafting specific provisions. managers The development and administration of a fair human resources Newly promoted E-class system means there is no gender disparity in terms of basic employee training Compliance seminars Overseas management training Human rights seminars salaries in the SMM Group. E-class Outside seminars/workshops Brush-up training

Newly promoted S-class Seminars relating to women’s career support Company-wide correspondence education employee training Training in Japan Fee assistance for language proficiency tests

(at each branch office) Supervisor/line leader training follow-up Language training prior to overseas assignment Supervisor/line leader training S-class Overseas training • Global course • Training course • Short-term study/secondment course for new employees Equipment skills training

Newly promoted F-class Hazard simulation training

employee training Pursue higher education in Japan Introductory duty-based OJT (at each branch office) New employee supervisor training education employee Prospective F-class J-class 3-year new employee training program • Introductory training • Pre-departure training (for short-term overseas training) • Short-term overseas training • Second-year training

49 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 50 Respect for People and Human Rights People and Initiatives Relating to Employee Diversity Human Rights-related Data

Working Environments Favorable to Women Working with the Disabled A full-scale effort to create working environments favorable to SMM has so far been implementing an action plan aimed at SMM Group Policy on Human Rights women got underway in July 2012 with the establishment of the employing people with disabilities who are able to work at an The SMM Group’s policy on human rights, in accordance with the SMM Group Corporate Philosophy and the SMM Group Code Female Activation Support Group within the Personnel existing workplace. But in order to realize our CSR Policy and of Conduct, has been established as follows. Department. The aim of the group’s activities is to develop SMM respond to revisions to the statutory disabled employees ratio, we 1. The SMM Group will comply with domestic laws and international standards relating to human rights and encourage persons within into a company where ambitious female employees feel motivated additionally started on creating workplaces that are adapted to the the Group, as well as outside parties over which the Group has influence, to work toward the realization of a society without human and are able to work dynamically, gaining a sense of personal characteristics of people with disabilities, complementing our rights infringements. growth through their jobs while demonstrating their full potential. initiatives to date. This led to the employment of one intellectually 2. The SMM Group will not allow harassment or other incidents of a discriminatory nature within the Group and will make efforts to Initiatives are undertaken in line with this policy under the following disabled person in FY2013. prevent such incidents from occurring among outside parties over which the Group has influence. three main categories and made known throughout the company. SMM’s average disabled employee ratio for FY2013 came to 3. The SMM Group will not engage in child labor or forced labor and will make efforts to prevent child labor or forced labor from 1) Promotion of awareness only 1.84%, but we started accepting trainees from special occurring among outside parties over which the Group has influence. 2) Review of systems schools and will now pursue activities with an eye to regular hiring 3) Development of infrastructure of new graduates. At the same time, we will work to create 4. The SMM Group will show other considerations to human rights in addition to items 1-3 above within the Group and in relationships In FY 2013, training for managers and supervisors and for all workplaces that can take on people with disabilities, while with outside parties over which the Group has influence. female employees was held on 22 occasions, primarily at directly promoting awareness about the intellectually disabled and 5. The SMM Group will establish appropriate measures and procedures for responding to human rights problems if they should occur. controlled workplaces. In FY2014, follow-up training to the above advancing education about protecting the human rights of the 6. The SMM Group will identify and stay aware of the current and changing state of human rights in the world, as well as the impact of will be held, and related content will be added to training at a disabled. corporations in the area of human rights, and carry out awareness-raising activities and other necessary measures on an ongoing number of levels, such as training for management, human basis. resources personnel and female management track employees. Support for Veteran Employees This is because support for women’s careers has to be pursued with all individuals understanding that it is an extension of efforts Since revisions were made to SMM’s manager re-employment ■ FY2013 Total Annual Hours of Education (hours) ■ Disabled Employee Ratio Transition to enhance the system in FY2013, we have rehired all employees over the age of (SMM non-consolidated) General Section Regular corporate 60 who wished to remain employed. With an increasing number of Officers managers managers employees Other Total (%) people making use of the system, we have now started reviewing Statutory ratio competitiveness of SMM revised the SMM Group and suitable levels of treatment and systems that can contribute to non- 171 1,850 7,293 35,066 738 45,118 2.0 motivational improvements. consolidated because it is 1.89 1.88 paramount that they Consolidated 1.9 subsidiaries 364 884 2,409 13,428 2,761 19,846 understand it is the Initiatives Relating to Locally-hired in Japan 1.86 first step in 1.8 Employees at Overseas Affiliates Consolidated Statutory ratio 1.84 embracing diversity. subsidiaries 739 151 3,326 43,471 2,706 50,393 1.79 1.7  Consultation for an employee returning to work The SMM Group clarifies recruitment processes for each overseas overseas facility while adhering strictly to laws and ordinances of the Annual hours respective regions. Fairness in job appraisal, including of education 10.6 12.7 12.6 4.1 11.4 1.6 Systems mainly for providing support to employees returning to per employee work after maternity and childcare leave were reviewed between promotions, is also ensured. Actual conditions are periodically confirmed through the * Figures are limited to education/training organized by personnel and general affairs divisions 1.5 2013 and 2014, with revisions notified via the in-house bulletin and FY2009 FY2010 FY2011 FY2012 FY2013 electronic bulletin boards implementation of Group-wide questionnaires. average average average average average · Standardized consultations prior to taking maternity leave and ■ Human Resources Development Program (SMM Employees) prior to returning to work Initiatives for Enhancing Work-life Balance · Added childcare-related reasons as grounds for staggered Self- working hours A satisfying lifestyle leads to satisfaction at work, too. Based on OJT development OFF-JT this belief, SMM is making efforts to enhance the work-life balance · Revised standards for selecting employees who take childcare Self- Head Office OJT Outside International training leave as candidates for promotion of employees. development employee (university Rank-based training Specialized education placement Other program assistance graduate) education · Established special hourly childcare leave Efforts include strengthening, and promoting the use of, various · Revised provisions for use of company housing systems. In addition to restricting long working hours and encouraging employees to take paid leave, we have enhanced · Enabled women to work under their maiden names Officers the reduced working hour system available during child care and These systems allow employees who both work and raise General manager established a new return-to-work system. follow-up training Executive children, and employees working with them, to think about and management program We are also directing energy into enhancing the child-care leave General manager choose a suitable working style. second-year training system, elderly and nursing care systems, and our response to the General Managerial

Also during FY2013, establishment of female lockers, showers managers Newly promoted general issue study groups and toilets progressed at four SMM-controlled plants and business Japanese Law for Measures to Support the Development of the manager training Next Generation. locations, and reports on completion of infrastructure development Middle management were received from group companies, too. Establishing such In advancing these efforts, we make full use of labor- Newly promoted section program infrastructure creates the right environment for expanding the management councils for surveying current conditions and manager training Management Section basic course responsibilities of women in the workplace. drafting specific provisions. managers The development and administration of a fair human resources Newly promoted E-class system means there is no gender disparity in terms of basic employee training Compliance seminars Overseas management training Human rights seminars salaries in the SMM Group. E-class Outside seminars/workshops Brush-up training

Newly promoted S-class Seminars relating to women’s career support Company-wide correspondence education employee training Training in Japan Fee assistance for language proficiency tests

(at each branch office) Supervisor/line leader training follow-up Language training prior to overseas assignment Supervisor/line leader training S-class Overseas training • Global course • Training course • Short-term study/secondment course for new employees Equipment skills training

Newly promoted F-class Hazard simulation training

employee training Pursue higher education in Japan Introductory duty-based OJT (at each branch office) New employee supervisor training education employee Prospective F-class J-class 3-year new employee training program • Introductory training • Pre-departure training (for short-term overseas training) • Short-term overseas training • Second-year training

49 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 50 Respect for People and Human Rights People and Human Rights-related Data

■ Number of Employees/Officers Worldwide (Consolidated) (March 31, 2014) ■ Employee Turnover Number and Percentage (FY2013)

Employees Average number of Younger than 30 30–49 years old 50 and older Total No. of employees at year-end gender breakdown non-regular/limited- Location Total Temporary Full-time Regular term employees employees Male Female Male Female Male Female Managers Total Male Female during year officers employees Departures 12 13 19 10 39 5 98 SMM 20 442 1,656 2,118 1,891 227 231 2,349 89 non-consolidated Japan Total employees 658 201 2,754 446 1,139 73 5,271 Consolidated 61 364 2,809 3,234 2,744 490 412 3,646 173 Turnover (%) 1.8 6.5 0.7 2.2 3.4 6.8 1.9 subsidiaries in Japan Departures 11 0 20 7 13 0 51 Consolidated 39 450 2,807 3,296 2,349 947 121 3,417 489 subsidiaries overseas U.S.A. Total employees 56 0 162 12 88 11 329 Subtotal 120 1,256 7,272 8,648 6,984 1,664 764 9,412 751 Turnover (%) 19.6 0 12.3 58.3 14.8 0 15.5 * The 20 full-time officers of Sumitomo Metal Mining Co., Ltd. and 764 non-regular/limited-term employees are not included in the figure presented in the Corporate Data Departures 0 0 0 0 0 0 0 on page 5 of this report, hence the different total here. South Korea Total employees 0 0 3 2 0 0 5 Turnover (%) 0 0 0 0 0 0 0 0 0 ■ Number of Employees/Officers by Region (Consolidated) (March 31, 2014) Departures 0 0 0 0 0 Peru Total employees 1 1 6 2 1 1 12 Japan U.S.A. South Korea Peru Chile China Philippines Taiwan Turnover (%) 0 0 0 0 0 0 0 5,995 335 6 14 35 852 1,077 437 Departures 0 0 0 0 0 0 0 Chile Total employees 2 1 16 4 6 3 32 Singapore Malaysia Thailand Australia Solomon Islands Brazil Total Turnover (%) 0 0 0 0 0 0 0 39 530 4 6 64 18 9,412 Departures 170 103 26 28 0 0 327 China Total employees 253 171 244 157 7 3 835 Turnover (%) 67.2 60.2 10.7 17.8 0 0 39.2 Departures 18 7 16 0 2 0 43 ■ Consolidated Employee Breakdown (March 31, 2014) Philippines Total employees 383 131 412 85 19 4 1,034 Turnover (%) 4.7 5.3 3.9 0 10.5 0 4.2 Younger than 30 30–49 years old 50 and older Total Departures 23 28 44 39 0 2 136 Male Female Male Female Male Female Taiwan Total employees 31 29 227 102 16 6 411 Managers 34 8 666 69 468 11 1,256 Turnover (%) 74.2 96.6 19.4 38.2 0 33.3 33.1

Regular employees 1,449 609 3,416 876 828 94 7,272 Departures 0 0 0 0 0 0 0 Singapore Total employees 0 3 18 11 5 1 38 Subtotal 1,483 617 4,082 945 1,296 105 8,528 Turnover (%) 0 0 0 0 0 0 0 * Full-time officers of Sumitomo Metal Mining Co., Ltd.: All male, 50 and older Departures 42 31 19 14 1 1 108 * The 120 full-time officers and 764 non-regular/limited-term employees of the SMM Group are not included in this table, hence the different totals under “Number of Employees/Officers (Consolidated)” and “Number of Employees/Officers Worldwide (Consolidated)” on this page Malaysia Total employees 96 77 216 120 12 2 523 Turnover (%) 43.8 40.3 8.8 11.7 8.3 50 20.7 Departures 0 0 0 0 0 0 0 ■ Number of Locally-hired Senior Managers (General Managers and Above) at Overseas Affiliates (March 31, 2014) Thailand Total employees 0 0 0 0 0 0 0 Turnover (%) 0 0 0 0 0 0 0 No. No. Company Company Departures 0 0 0 0 0 0 0 Male Female Male Female Australia Total employees 0 1 1 1 1 0 4 1 1 0 1 Sumitomo Metal Mining Pogo LLC (USA) Malaysian Electronics Materials Sdn. Bhd. (Malaysia) Turnover (%) 0 0 0 0 0 0 0 Sumitomo Metal Mining Chile Ltda. (Chile) 2 1 Sumiko Electronics Taiwan Co., Ltd. (Taiwan) 1 2 Departures 0 0 0 0 0 0 0 Total employees 1 1 20 2 2 1 27 Sumitomo Metal Mining do Brasil Ltda. (Brazil) 0 1 SH Electronics Chengdu Co., Ltd. (China) 1 1 Solomon Islands Turnover (%) 0 0 0 0 0 0 0 Coral Bay Nickel Corporation (Philippines) 4 1 SH Electronics Suzhou Co., Ltd. (China) 1 1 Departures 0 0 0 0 0 0 0 Taganito HPAL Nickel Corporation (Philippines) 1 1 SH Precision Chengdu Co., Ltd. (China) 1 0 Brazil Total employees 2 1 3 1 0 0 7 Sumitomo Metal Mining Philippine Holdings Corporation (Philippines) 2 1 SMM KOREA Co., Ltd. (South Korea) 1 1 Turnover (%) 0 0 0 0 0 0 0 Departures 276 182 144 98 55 8 763 Sumitomo Metal Mining Management (Shanghai) Co., Ltd. (China) 2 0 Shanghai Sumiko Electronic Paste Co., Ltd. (China) 2 1 Total Total employees 1,483 617 4,082 945 1,296 105 8,528 SH Asia Pacific Pte. Ltd. (Singapore) 3 0 Total 24 16 Turnover (%) 18.6 29.5 3.5 10.4 4.2 7.6 8.9 Malaysian SH Electronics Sdn. Bhd. (Malaysia) 2 3 * Figures exclude 120 officers, 764 non-regular, 751 limited-term and temporary employees * Turnover rate (%) = number of departures ÷ number of employees at fiscal year end × 100

51 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 52 Respect for People and Human Rights People and Human Rights-related Data

■ Number of Employees/Officers Worldwide (Consolidated) (March 31, 2014) ■ Employee Turnover Number and Percentage (FY2013)

Employees Average number of Younger than 30 30–49 years old 50 and older Total No. of employees at year-end gender breakdown non-regular/limited- Location Total Temporary Full-time Regular term employees employees Male Female Male Female Male Female Managers Total Male Female during year officers employees Departures 12 13 19 10 39 5 98 SMM 20 442 1,656 2,118 1,891 227 231 2,349 89 non-consolidated Japan Total employees 658 201 2,754 446 1,139 73 5,271 Consolidated 61 364 2,809 3,234 2,744 490 412 3,646 173 Turnover (%) 1.8 6.5 0.7 2.2 3.4 6.8 1.9 subsidiaries in Japan Departures 11 0 20 7 13 0 51 Consolidated 39 450 2,807 3,296 2,349 947 121 3,417 489 subsidiaries overseas U.S.A. Total employees 56 0 162 12 88 11 329 Subtotal 120 1,256 7,272 8,648 6,984 1,664 764 9,412 751 Turnover (%) 19.6 0 12.3 58.3 14.8 0 15.5 * The 20 full-time officers of Sumitomo Metal Mining Co., Ltd. and 764 non-regular/limited-term employees are not included in the figure presented in the Corporate Data Departures 0 0 0 0 0 0 0 on page 5 of this report, hence the different total here. South Korea Total employees 0 0 3 2 0 0 5 Turnover (%) 0 0 0 0 0 0 0 0 0 ■ Number of Employees/Officers by Region (Consolidated) (March 31, 2014) Departures 0 0 0 0 0 Peru Total employees 1 1 6 2 1 1 12 Japan U.S.A. South Korea Peru Chile China Philippines Taiwan Turnover (%) 0 0 0 0 0 0 0 5,995 335 6 14 35 852 1,077 437 Departures 0 0 0 0 0 0 0 Chile Total employees 2 1 16 4 6 3 32 Singapore Malaysia Thailand Australia Solomon Islands Brazil Total Turnover (%) 0 0 0 0 0 0 0 39 530 4 6 64 18 9,412 Departures 170 103 26 28 0 0 327 China Total employees 253 171 244 157 7 3 835 Turnover (%) 67.2 60.2 10.7 17.8 0 0 39.2 Departures 18 7 16 0 2 0 43 ■ Consolidated Employee Breakdown (March 31, 2014) Philippines Total employees 383 131 412 85 19 4 1,034 Turnover (%) 4.7 5.3 3.9 0 10.5 0 4.2 Younger than 30 30–49 years old 50 and older Total Departures 23 28 44 39 0 2 136 Male Female Male Female Male Female Taiwan Total employees 31 29 227 102 16 6 411 Managers 34 8 666 69 468 11 1,256 Turnover (%) 74.2 96.6 19.4 38.2 0 33.3 33.1

Regular employees 1,449 609 3,416 876 828 94 7,272 Departures 0 0 0 0 0 0 0 Singapore Total employees 0 3 18 11 5 1 38 Subtotal 1,483 617 4,082 945 1,296 105 8,528 Turnover (%) 0 0 0 0 0 0 0 * Full-time officers of Sumitomo Metal Mining Co., Ltd.: All male, 50 and older Departures 42 31 19 14 1 1 108 * The 120 full-time officers and 764 non-regular/limited-term employees of the SMM Group are not included in this table, hence the different totals under “Number of Employees/Officers (Consolidated)” and “Number of Employees/Officers Worldwide (Consolidated)” on this page Malaysia Total employees 96 77 216 120 12 2 523 Turnover (%) 43.8 40.3 8.8 11.7 8.3 50 20.7 Departures 0 0 0 0 0 0 0 ■ Number of Locally-hired Senior Managers (General Managers and Above) at Overseas Affiliates (March 31, 2014) Thailand Total employees 0 0 0 0 0 0 0 Turnover (%) 0 0 0 0 0 0 0 No. No. Company Company Departures 0 0 0 0 0 0 0 Male Female Male Female Australia Total employees 0 1 1 1 1 0 4 1 1 0 1 Sumitomo Metal Mining Pogo LLC (USA) Malaysian Electronics Materials Sdn. Bhd. (Malaysia) Turnover (%) 0 0 0 0 0 0 0 Sumitomo Metal Mining Chile Ltda. (Chile) 2 1 Sumiko Electronics Taiwan Co., Ltd. (Taiwan) 1 2 Departures 0 0 0 0 0 0 0 Total employees 1 1 20 2 2 1 27 Sumitomo Metal Mining do Brasil Ltda. (Brazil) 0 1 SH Electronics Chengdu Co., Ltd. (China) 1 1 Solomon Islands Turnover (%) 0 0 0 0 0 0 0 Coral Bay Nickel Corporation (Philippines) 4 1 SH Electronics Suzhou Co., Ltd. (China) 1 1 Departures 0 0 0 0 0 0 0 Taganito HPAL Nickel Corporation (Philippines) 1 1 SH Precision Chengdu Co., Ltd. (China) 1 0 Brazil Total employees 2 1 3 1 0 0 7 Sumitomo Metal Mining Philippine Holdings Corporation (Philippines) 2 1 SMM KOREA Co., Ltd. (South Korea) 1 1 Turnover (%) 0 0 0 0 0 0 0 Departures 276 182 144 98 55 8 763 Sumitomo Metal Mining Management (Shanghai) Co., Ltd. (China) 2 0 Shanghai Sumiko Electronic Paste Co., Ltd. (China) 2 1 Total Total employees 1,483 617 4,082 945 1,296 105 8,528 SH Asia Pacific Pte. Ltd. (Singapore) 3 0 Total 24 16 Turnover (%) 18.6 29.5 3.5 10.4 4.2 7.6 8.9 Malaysian SH Electronics Sdn. Bhd. (Malaysia) 2 3 * Figures exclude 120 officers, 764 non-regular, 751 limited-term and temporary employees * Turnover rate (%) = number of departures ÷ number of employees at fiscal year end × 100

51 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 52 Respect for People Initiatives in the Six Key CSR Areas and Human Rights Respect for People and Human Rights

that the people providing the training can set goals, evolving into an organization where more diverse Protection of Human Rights Human Resources Development conscious of the skills that the engineer can acquire in employees, including women, can be actively involved, it specific occupations, and the person receiving the training will be possible for us to demonstrate a strength that is The SMM Group has set forth a policy on human The SMM Group undertakes human resources rights aligned with the SMM Group Corporate development in line with the following basic can also perform their work, conscious of upgrading their generated through diversity based on a new set of values, Philosophy and the SMM Group Code of Conduct. In approaches, as stipulated in our human resources own skills. Every year, by following this PDCA cycle, the although the positive effects of this will not be immediately determining the policy, opinions were sought both development regulations. results of each year of training will be obtained as a level of apparent. If we have never felt disadvantaged in the from within the Group, as well as from outside experts. achievement, or improvement in numerical value. A real corporate environment, then we might have all the more The policy prescribes compliance not only with (1) Actively support the motivation and ambitions of sense of their achievements will also be felt at the Plant doubt about such initiatives. Even so, with an eye to the domestic laws and ordinances relating to human employees Engineering Outcomes Forum. This is attended by future, we need to think about what direction should be rights, but also with various international standards. (2) Tailor activity to match the advancement of each employees with the experience of three, six and nine years taken. Furthermore, we plan to appeal to outside parties with individual employee of continuous service, as they mark milestones of their Since 2013, we have put effort into training targeted at whom the SMM Group has a relationship to prevent (3) Carry out activity in a systematic and organized manner development. influencing workplaces, supervisors and employees in a human rights problems from arising. There were no on an ongoing basis with a view to the long term By enhancing our engineering technologies, plant way that diverse talents will be accepted and nurtured reports about discrimination equivalent to human (4) Link activity to human resources management systems management technologies and irrespective of gender or work style. As well as enhancing rights infringement during FY2013. (5) Adapt flexibly to diversifying management needs plant development technologies systems that support those employees who work and raise We are pushing ahead with the education of in this way, we will be able to children, this could be described as building foundations employees on human rights issues throughout the supply highly reliable and necessary for developing a workplace environment that is entire SMM Group. Human Resources Development in Engineering Divisions productive equipment, making both rewarding and where it possible to construct plants employees can balance work Human Rights Education and Due Diligence capable of stable operations. and home life. The SMM Group is striving to establish workplaces free of Kiyoshi Ohashi human rights infringements and to cultivate employees with Manager, Production Systems Engineering Dept., strong human rights awareness. In 2013, with an aim of Engineering Div. raising awareness and ensuring compliance with the SMM Group Policy on Human Rights, an instructor's manual was Narumi Yoshida compiled in Japanese, English, Chinese and Spanish Employee Diversity Female Activation Supporting Group Leader, under the supervision of an outside expert on human rights, Personnel Dept. and education was delivered targeting all Group employees. Furthermore, in order to build a framework for Given our aims to raise corporate competitiveness managing human rights based on various international and achieve sustainable growth, we are making standards, we examined specific details for human rights efforts to acquire and develop a diverse workforce due diligence (survey) among employees, and as part of comprising human resources who stand out as Selected by the Tokyo Stock Exchange as 1 this process, the SMM Group went out on location and ▲Plant Engineering Outcomes Forum individuals and who can make a contribution toward a Nadeshiko Brand for Career Support of attaining those aims. Female Employees for Second Consecutive Year conducted trial runs at the Ome District Division in Japan Even with an attitude and awareness of the need to develop and at CBNC in the Philippines. From FY2014, we will human resources and the need to carry on technologies and incorporate the knowledge acquired from these trial runs skills, amid the pressures of immediate work, it is getting Female Participation in the Workplace and perform human rights due diligence among employees increasingly harder to spend much time for education. at all Group business sites, and we will follow the PDCA However, even in these circumstances, we must continue to cycle for the Group-wide management of human rights. nurture plant engineers who have the technological Furthermore, from FY2014, we will also begin examining a capability to support SMM’s growth strategy of carrying out framework to expand the scope of our human rights construction projects. In the Engineering Division, with an management to also include our supply chain and the local aim of (1) developing the capabilities of plant engineers as communities around where our businesses have operated. quickly as possible, and (2) visualizing the technologies On March 3, 2014, SMM was recognized for the We will continue to enhance the effectiveness of our SMM possessed by them, we revised the previous education second year in a row as a Nadeshiko Brand by the Group Policy on Human Rights, and to promote these system, and in FY2010, we began using an improved Tokyo Stock Exchange for its support for women in activities so that SMM remains a company that enjoys the “system for developing plant engineer personnel” with the the workplace. Activities supporting greater female utmost confidence from society. participation at SMM still have a long way to go, aid of skills check sheets. A skills check sheet was prepared but this will encourage us to put even more effort for each branch of engineering, such as mechanical, into promoting these activities. electrical and civil. The sheets are used for assessing ▲Managing supervisors training 1. Nadeshiko Brand: Companies listed in the first section of the Tokyo several hundred skills, visualizing the levels of skills to be Stock Exchange are scored based on two factors: (1) career support acquired and assessed each fiscal year, as well as for for women, and (2) support for women balancing work and family. Initiatives supporting greater female participation can be setting goals for the next fiscal year. To start with, engineers Then, from among the top-ranking companies in each industry, those regarded as an activity aimed at fostering a corporate with superior financial performance are selected. In FY2013, 26 conduct a self-assessment and set their own targets, and companies (from 33 industries) were selected. organization and culture where diverse people can play then based on this, they communicate with the person active roles. As an organization that will continue to expand responsible for training, before settling on goals that will Hirokazu Yasuo globally, such initiatives are essential for us to secure improve their individual weaknesses and extend their General Manager of talented personnel and increase our competitiveness. By the Personnel Dept. individual strengths. Designing the system this way means

My Way of My Way of Doing Good Doing Good There are many kinds of people in workplaces and communities. We vary in personality, age, attitude and When overseas trainees have just arrived in Japan and are in the same workplace as me, I make it a point to gender, as well as in our strengths and weaknesses. Even if I have a differing opinion to someone, I make a actively communicate with them, not just about work, but also about the good things I have noticed about Japan point of always acknowledging their view and showing respect. This is because I want to be a person who since coming here and the good things about SMM that I have personally experienced since joining. I do this to wishes for everyone to be happy, not just themselves and their family. make use of my experiences as a non-Japanese employee, and so they can adapt quickly to life in Japan and working at SMM. Mana Shiraki Materials Research & Development Center, Technology Div. Zhu Bo Copper & Precious Metals Sales Dept., Non-Ferrous Metals Div.

53 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 54 Respect for People Initiatives in the Six Key CSR Areas and Human Rights Respect for People and Human Rights

that the people providing the training can set goals, evolving into an organization where more diverse Protection of Human Rights Human Resources Development conscious of the skills that the engineer can acquire in employees, including women, can be actively involved, it specific occupations, and the person receiving the training will be possible for us to demonstrate a strength that is The SMM Group has set forth a policy on human The SMM Group undertakes human resources rights aligned with the SMM Group Corporate development in line with the following basic can also perform their work, conscious of upgrading their generated through diversity based on a new set of values, Philosophy and the SMM Group Code of Conduct. In approaches, as stipulated in our human resources own skills. Every year, by following this PDCA cycle, the although the positive effects of this will not be immediately determining the policy, opinions were sought both development regulations. results of each year of training will be obtained as a level of apparent. If we have never felt disadvantaged in the from within the Group, as well as from outside experts. achievement, or improvement in numerical value. A real corporate environment, then we might have all the more The policy prescribes compliance not only with (1) Actively support the motivation and ambitions of sense of their achievements will also be felt at the Plant doubt about such initiatives. Even so, with an eye to the domestic laws and ordinances relating to human employees Engineering Outcomes Forum. This is attended by future, we need to think about what direction should be rights, but also with various international standards. (2) Tailor activity to match the advancement of each employees with the experience of three, six and nine years taken. Furthermore, we plan to appeal to outside parties with individual employee of continuous service, as they mark milestones of their Since 2013, we have put effort into training targeted at whom the SMM Group has a relationship to prevent (3) Carry out activity in a systematic and organized manner development. influencing workplaces, supervisors and employees in a human rights problems from arising. There were no on an ongoing basis with a view to the long term By enhancing our engineering technologies, plant way that diverse talents will be accepted and nurtured reports about discrimination equivalent to human (4) Link activity to human resources management systems management technologies and irrespective of gender or work style. As well as enhancing rights infringement during FY2013. (5) Adapt flexibly to diversifying management needs plant development technologies systems that support those employees who work and raise We are pushing ahead with the education of in this way, we will be able to children, this could be described as building foundations employees on human rights issues throughout the supply highly reliable and necessary for developing a workplace environment that is entire SMM Group. Human Resources Development in Engineering Divisions productive equipment, making both rewarding and where it possible to construct plants employees can balance work Human Rights Education and Due Diligence capable of stable operations. and home life. The SMM Group is striving to establish workplaces free of Kiyoshi Ohashi human rights infringements and to cultivate employees with Manager, Production Systems Engineering Dept., strong human rights awareness. In 2013, with an aim of Engineering Div. raising awareness and ensuring compliance with the SMM Group Policy on Human Rights, an instructor's manual was Narumi Yoshida compiled in Japanese, English, Chinese and Spanish Employee Diversity Female Activation Supporting Group Leader, under the supervision of an outside expert on human rights, Personnel Dept. and education was delivered targeting all Group employees. Furthermore, in order to build a framework for Given our aims to raise corporate competitiveness managing human rights based on various international and achieve sustainable growth, we are making standards, we examined specific details for human rights efforts to acquire and develop a diverse workforce due diligence (survey) among employees, and as part of comprising human resources who stand out as Selected by the Tokyo Stock Exchange as 1 this process, the SMM Group went out on location and ▲Plant Engineering Outcomes Forum individuals and who can make a contribution toward a Nadeshiko Brand for Career Support of attaining those aims. Female Employees for Second Consecutive Year conducted trial runs at the Ome District Division in Japan Even with an attitude and awareness of the need to develop and at CBNC in the Philippines. From FY2014, we will human resources and the need to carry on technologies and incorporate the knowledge acquired from these trial runs skills, amid the pressures of immediate work, it is getting Female Participation in the Workplace and perform human rights due diligence among employees increasingly harder to spend much time for education. at all Group business sites, and we will follow the PDCA However, even in these circumstances, we must continue to cycle for the Group-wide management of human rights. nurture plant engineers who have the technological Furthermore, from FY2014, we will also begin examining a capability to support SMM’s growth strategy of carrying out framework to expand the scope of our human rights construction projects. In the Engineering Division, with an management to also include our supply chain and the local aim of (1) developing the capabilities of plant engineers as communities around where our businesses have operated. quickly as possible, and (2) visualizing the technologies On March 3, 2014, SMM was recognized for the We will continue to enhance the effectiveness of our SMM possessed by them, we revised the previous education second year in a row as a Nadeshiko Brand by the Group Policy on Human Rights, and to promote these system, and in FY2010, we began using an improved Tokyo Stock Exchange for its support for women in activities so that SMM remains a company that enjoys the “system for developing plant engineer personnel” with the the workplace. Activities supporting greater female utmost confidence from society. participation at SMM still have a long way to go, aid of skills check sheets. A skills check sheet was prepared but this will encourage us to put even more effort for each branch of engineering, such as mechanical, into promoting these activities. electrical and civil. The sheets are used for assessing ▲Managing supervisors training 1. Nadeshiko Brand: Companies listed in the first section of the Tokyo several hundred skills, visualizing the levels of skills to be Stock Exchange are scored based on two factors: (1) career support acquired and assessed each fiscal year, as well as for for women, and (2) support for women balancing work and family. Initiatives supporting greater female participation can be setting goals for the next fiscal year. To start with, engineers Then, from among the top-ranking companies in each industry, those regarded as an activity aimed at fostering a corporate with superior financial performance are selected. In FY2013, 26 conduct a self-assessment and set their own targets, and companies (from 33 industries) were selected. organization and culture where diverse people can play then based on this, they communicate with the person active roles. As an organization that will continue to expand responsible for training, before settling on goals that will Hirokazu Yasuo globally, such initiatives are essential for us to secure improve their individual weaknesses and extend their General Manager of talented personnel and increase our competitiveness. By the Personnel Dept. individual strengths. Designing the system this way means

My Way of My Way of Doing Good Doing Good There are many kinds of people in workplaces and communities. We vary in personality, age, attitude and When overseas trainees have just arrived in Japan and are in the same workplace as me, I make it a point to gender, as well as in our strengths and weaknesses. Even if I have a differing opinion to someone, I make a actively communicate with them, not just about work, but also about the good things I have noticed about Japan point of always acknowledging their view and showing respect. This is because I want to be a person who since coming here and the good things about SMM that I have personally experienced since joining. I do this to wishes for everyone to be happy, not just themselves and their family. make use of my experiences as a non-Japanese employee, and so they can adapt quickly to life in Japan and working at SMM. Mana Shiraki Materials Research & Development Center, Technology Div. Zhu Bo Copper & Precious Metals Sales Dept., Non-Ferrous Metals Div.

53 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 54 Initiatives in the Six Key CSR Areas A company that accords safety the highest priority and provides comfortable Vision working environments Occupational Health and Safety for 2020  No occupational accidents throughout the  Create workplaces where protective equipment SMM Group (including business partners) (earplugs/masks) is unnecessary  Zero incidence of occupational disease  A vibrant company whose workforce is physically and mentally healthy Key Measures for Achieving the Vision for 2020

Minimize risks for existing equipment through risk assessments. Ensure the inherent safety of ● Strengthen work environment improvements and maintenance with a priority on Control Class Facilities: 1 new equipment. Physical 3 workplaces . Health ● Gather information on chemical substance regulations and legal revisions and carry out Implement rank-based safety education (SMM Anzen Dojyo, hazard simulation training, group appropriate action at related workplaces. Safety People: education, and education by outside instructors) to ensure that each worker accords safety the highest priority, and enhance the safety awareness and skills. Mental ● Implement the PDCA cycle for safety activity (work observations, risk assessments, safety Continue current activities and enhance mental health initiatives. Management: audits, etc.) with general managers of workplaces leading efforts to ensure safety within the Health organization. 1. Control Class 3: The average concentration of a harmful chemical substance in the air in the work environment exceeds the control level

Target CY2013 Achievements Challenges CY2014 Plan

Number of accidents in CY2013 ● Number of accidents in CY2013 ● More than half of all accidents ● Identify accident risks in priority areas ● ● Employees (SMM-controlled workplaces Employees: 1 lost time; 16 in total (17 additional small-scale accidents) occurred at sites after they had Strengthen residual risk management Contractors: 0 lost time; 5 in total (1 additional small-scale accidents) achieved long periods without any ● Enhance education for less-experienced employees2 and group companies): accidents ● Implement group education for individual workplaces 3 or fewer lost time; 10 or fewer in total ● More than half of all accidents ● Enhance safety management for contractors ● Contractors: (including small-scale accidents) ● Develop safety leaders at the Anzen Dojyo 2 or fewer lost time; 4 or fewer in total involved less-experienced employees 2. Less-experienced employees: Employees with less than five years’ experience ● Similar unsafe practices are being repeated

● No new cases of occupational disease ● There were no new cases of occupational disease ● Work environment: Although on a ● Strengthen the connection between health-related improvement plans and budgets ● ● No Control Class 3 workplaces Number of Control Class 3 workplaces (as of March 2014) declining trend overall as increases (coordination with business divisions) Dust: 3; lead: 0; nickel compounds: 3; arsenic and its compounds: 1; and decreases fluctuate, a zero ● Steadily implement and continue work environment improvements cobalt and its inorganic compounds: 15; chlorine: 2 level has not yet been reached ● Manage use and maintenance of protective equipment ● Cobalt (newly included as a ● Comply with new regulations and legal revisions relating to chemical substances specified chemical): There are 15 Control Class 3 workplaces

Promote the four cares (self-care, care by the ● Continued meetings with industrial physicians for employees who ● Implementing on an ongoing basis ● Counseling for employees who work long hours ● organization, care by health staff, outside care) worked long hours Mental health checks ● Mental health checks were implemented through employee ● Mental health care training (managers, supervisors and regular employees) assistance programs (EAP) (2,781 employees) ● Industrial counselor training ● Mental health care training was implemented (26 times) ● Industrial counselor training (3 counselors)

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during CY2013? Progress in CY2013 I have visited the sites of many corporations and accident numbers currently remain level right across the country. I Areas we focused on in the Occupational Health & Safety Subcommittee in CY2013 were the SMM Anzen sense stagnation of activities and a poor ability to pass down knowledge. In my view, there needs to be a break away Dojyo seminar for developing leaders who will take charge of health and safety management at sites, and risk from human-dependent “zero accident activity,” and the key to that lies in the very basis of that activity—identifying assessment education to assist the assessment of and action against risk factors by top executives at each and reducing hazards. A common problem I find is that a lot of activity is superficial rather than focused on pinning facility. Employees attending the Anzen Dojyo are asked to plan and administrate safety activities matching down the true causes. In the case of SMM, while the number of accidents is on a declining trend, I have felt during the actual circumstances at their own site. Top executives at workplaces also have stronger awareness now. my observations and guidance at business locations since 2010 that similar problems keep arising. Although the Risk assessments, too, are continually improved through ongoing dialogue with ordinary workers, for example issues do vary from location to location, there is a strong desire to deal with them through a united effort of everyone about ways to deal with remaining risks, thereby reducing the number of risk factors. This is to ensure that from top down to the people at the front line of operations. risks are not simply addressed through initiatives forced on workplaces from above. In 2013, while there were fewer lost-time accidents, the total number of accidents increased. Through activities suited to individual sites, In your view, what does society require in regard to occupational health and safety? I would like to work on preventing accidents before they occur. As SMM continues to develop as a global corporation, occupational health and safety initiatives are going to be a vital factor in the development of precious human resources, environmental improvements, and the strengthening of Response to Stakeholder Comments business foundations. In particular, I hope you will work to implement real countermeasures to accidents by In CY2013, we started to review the safety of machines and equipment through joint efforts with the enhancing in-house standards to ensure the safety of machines and equipment, as well as engage in kaizen Engineering Division. We are working to unify rules and standards that will allow us to maintain safety of (continual improvements), striving together, from design through to production, to gradually build up a greater sense equipment at each facility, including electrical wiring and piping, right from the design stage. We will seek Takashi Sugiura Noboru Furusawa Chairman, Occupational Health & Safety Representative, Anzen to Hitozukuri Support of certainty about safety. dialogue with not only operating sites, but also each of the business divisions at Head Office, to carry out Subcommittee; Executive Officer; (Safety and Human Resources appropriate investment aimed at realizing work environments where the top priority is making sure that all CSR Executive Officer; General Manager, Development Support) employees return home safely at the end of the day. Safety & Environment Control Dept.

55 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 56 Initiatives in the Six Key CSR Areas A company that accords safety the highest priority and provides comfortable Vision working environments Occupational Health and Safety for 2020  No occupational accidents throughout the  Create workplaces where protective equipment SMM Group (including business partners) (earplugs/masks) is unnecessary  Zero incidence of occupational disease  A vibrant company whose workforce is physically and mentally healthy Key Measures for Achieving the Vision for 2020

Minimize risks for existing equipment through risk assessments. Ensure the inherent safety of ● Strengthen work environment improvements and maintenance with a priority on Control Class Facilities: 1 new equipment. Physical 3 workplaces . Health ● Gather information on chemical substance regulations and legal revisions and carry out Implement rank-based safety education (SMM Anzen Dojyo, hazard simulation training, group appropriate action at related workplaces. Safety People: education, and education by outside instructors) to ensure that each worker accords safety the highest priority, and enhance the safety awareness and skills. Mental ● Implement the PDCA cycle for safety activity (work observations, risk assessments, safety Continue current activities and enhance mental health initiatives. Management: audits, etc.) with general managers of workplaces leading efforts to ensure safety within the Health organization. 1. Control Class 3: The average concentration of a harmful chemical substance in the air in the work environment exceeds the control level

Target CY2013 Achievements Challenges CY2014 Plan

Number of accidents in CY2013 ● Number of accidents in CY2013 ● More than half of all accidents ● Identify accident risks in priority areas ● ● Employees (SMM-controlled workplaces Employees: 1 lost time; 16 in total (17 additional small-scale accidents) occurred at sites after they had Strengthen residual risk management Contractors: 0 lost time; 5 in total (1 additional small-scale accidents) achieved long periods without any ● Enhance education for less-experienced employees2 and group companies): accidents ● Implement group education for individual workplaces 3 or fewer lost time; 10 or fewer in total ● More than half of all accidents ● Enhance safety management for contractors ● Contractors: (including small-scale accidents) ● Develop safety leaders at the Anzen Dojyo 2 or fewer lost time; 4 or fewer in total involved less-experienced employees 2. Less-experienced employees: Employees with less than five years’ experience ● Similar unsafe practices are being repeated

● No new cases of occupational disease ● There were no new cases of occupational disease ● Work environment: Although on a ● Strengthen the connection between health-related improvement plans and budgets ● ● No Control Class 3 workplaces Number of Control Class 3 workplaces (as of March 2014) declining trend overall as increases (coordination with business divisions) Dust: 3; lead: 0; nickel compounds: 3; arsenic and its compounds: 1; and decreases fluctuate, a zero ● Steadily implement and continue work environment improvements cobalt and its inorganic compounds: 15; chlorine: 2 level has not yet been reached ● Manage use and maintenance of protective equipment ● Cobalt (newly included as a ● Comply with new regulations and legal revisions relating to chemical substances specified chemical): There are 15 Control Class 3 workplaces

Promote the four cares (self-care, care by the ● Continued meetings with industrial physicians for employees who ● Implementing on an ongoing basis ● Counseling for employees who work long hours ● organization, care by health staff, outside care) worked long hours Mental health checks ● Mental health checks were implemented through employee ● Mental health care training (managers, supervisors and regular employees) assistance programs (EAP) (2,781 employees) ● Industrial counselor training ● Mental health care training was implemented (26 times) ● Industrial counselor training (3 counselors)

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during CY2013? Progress in CY2013 I have visited the sites of many corporations and accident numbers currently remain level right across the country. I Areas we focused on in the Occupational Health & Safety Subcommittee in CY2013 were the SMM Anzen sense stagnation of activities and a poor ability to pass down knowledge. In my view, there needs to be a break away Dojyo seminar for developing leaders who will take charge of health and safety management at sites, and risk from human-dependent “zero accident activity,” and the key to that lies in the very basis of that activity—identifying assessment education to assist the assessment of and action against risk factors by top executives at each and reducing hazards. A common problem I find is that a lot of activity is superficial rather than focused on pinning facility. Employees attending the Anzen Dojyo are asked to plan and administrate safety activities matching down the true causes. In the case of SMM, while the number of accidents is on a declining trend, I have felt during the actual circumstances at their own site. Top executives at workplaces also have stronger awareness now. my observations and guidance at business locations since 2010 that similar problems keep arising. Although the Risk assessments, too, are continually improved through ongoing dialogue with ordinary workers, for example issues do vary from location to location, there is a strong desire to deal with them through a united effort of everyone about ways to deal with remaining risks, thereby reducing the number of risk factors. This is to ensure that from top down to the people at the front line of operations. risks are not simply addressed through initiatives forced on workplaces from above. In 2013, while there were fewer lost-time accidents, the total number of accidents increased. Through activities suited to individual sites, In your view, what does society require in regard to occupational health and safety? I would like to work on preventing accidents before they occur. As SMM continues to develop as a global corporation, occupational health and safety initiatives are going to be a vital factor in the development of precious human resources, environmental improvements, and the strengthening of Response to Stakeholder Comments business foundations. In particular, I hope you will work to implement real countermeasures to accidents by In CY2013, we started to review the safety of machines and equipment through joint efforts with the enhancing in-house standards to ensure the safety of machines and equipment, as well as engage in kaizen Engineering Division. We are working to unify rules and standards that will allow us to maintain safety of (continual improvements), striving together, from design through to production, to gradually build up a greater sense equipment at each facility, including electrical wiring and piping, right from the design stage. We will seek Takashi Sugiura Noboru Furusawa Chairman, Occupational Health & Safety Representative, Anzen to Hitozukuri Support of certainty about safety. dialogue with not only operating sites, but also each of the business divisions at Head Office, to carry out Subcommittee; Executive Officer; (Safety and Human Resources appropriate investment aimed at realizing work environments where the top priority is making sure that all CSR Executive Officer; General Manager, Development Support) employees return home safely at the end of the day. Safety & Environment Control Dept.

55 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 56 Occupational Health and Safety Occupational Health and Safety

(4) Strengthening of education for less-experienced ■ Data on Occupational Accidents in Japan Anzen Dojyo Basic Approach employees SMM non-consolidated Year Group companies Total SMM engages in a wide range of activities in line with its CSR (5) Enhance safety management for contractors The Safety & Environment Control Department has been (directly controlled) Policy, which states, “According safety the highest priority, To raise the effectiveness of measures, we implement running the SMM Anzen Dojyo (lit. safety training center), to All accidents 5 11 16 Fatalities 0 0 0 activities with the focus narrowed down to the prevention of 2013 SMM shall provide safe, comfortable working environments help stimulate safety activities and safety education at Lost time accidents 0 1 1 and seek to eliminate occupational accidents.” accidents peculiar to that workplace based on analysis of workplaces, since 2013. The purpose of the Anzen Dojyo is to Working days lost 204 97 301 The Vision for 2020 includes, “a company that accords safety accidents which have occurred. develop human resources and safety leaders who will be core All accidents 3 8 11 Fatalities 0 0 0 the highest priority and provides comfortable working Safety activities are also advanced by employees of the safety promoters at each workplace. These safety leaders will 2012 Lost time accidents environments,” stipulating the following four specific targets. SMM Group together with contractors. head efforts to continually raise the standard of safety activities 0 3 3 Working days lost 9 172 181 Health-related activities during 2013 were pursued under the  No occupational accidents throughout the SMM at workplaces. All accidents 5 11 16 Safety following themes. Fatalities 0 0 0 Group (including business partners) The Anzen Dojyo provides education about the mechanisms 2011 (1) Steady implementation and continuation of work by which accidents occur, ways to lower risk, and other Lost time accidents 1 4 5  Zero incidence of occupational disease Physical  environment improvements aspects of safety based on results from analysis of accidents Working days lost 313 60 373 Create workplaces where protective equipment All accidents Health (earplugs/masks) is unnecessary 8 11 19 (2) Protective equipment usage management and upkeep which have occurred within the SMM Group in the past. Safety Fatalities 0 0 0 2010 (3) Enhancing awareness of, and communication about, the Lost time accidents Mental  A vibrant company whose workforce is physically leaders will return to their workplaces with their newly acquired 2 3 5 Health and mentally healthy dangers and hazards of chemical substances knowledge and put it to use, for example in group education Working days lost 98 27 125 (4) Compliance with stricter work environment regulations and safety activities. All accidents 5 9 14 Safety-related activities are advanced under a basic policy to Fatalities 0 0 0 relating to chemical substances 2009 “nurture a safety culture and ensure thorough safety Lost time accidents 3 1 4 management at all business sites and Group companies” in (5) Care as part of health management (e.g. health Working days lost 453 1 454 guidance for employees showing signs of conditions) order to provide safety assurance and to realize the CSR * Boundary: SMM, subsidiaries in Japan, Nippon Ketjen Co., Ltd., N.E. Chemcat Corporation, Policy and Vision for 2020. A labor-management agreement pertaining to dust, visual and the Mie District Div. of Mitsui Sumitomo Metal Mining Brass & Copper Co., Ltd. display terminals (VDT), lead and noise sets forth procedures * No fatal accidents have occurred at SMM or a group company since 2004 Health-related activities include ascertaining levels of dust, * Working days lost also includes working days lost in the year of reporting for workers involved lead, noise, specified chemicals and organic solvents within for preventing illness and taking action when illnesses occur. in accidents during the previous year work environments, making improvements to those In regard to indium compounds, which were added as specified chemical substances in October 2012, procedures environments where necessary, and enhancing occupational  A seminar at the Anzen Dojyo (Oji-kan)  Example of illustrations Issues and Targets health management. and improvements were being advanced in accordance with from training materials industry guidelines even before the regulations were One safety issue is that less-experienced employees were introduced. With the addition of cobalt as a specified chemical involved in around 60% of all accidents in 2013, up from substance, improvements to work environments are required at Mental Health Care around 40% in 2012. This is thought to be due to inadequate Occupational Health and Safety some workplaces and priority is currently placed on carrying Initiatives related to mental health care for employees include education in workplaces about residual risks. Another issue is Management Frameworks out those improvements. mental health care training by specialized institutions and that workplaces which had previously maintained “zero The executive officer with jurisdiction over the Safety & 1. Work observations: Fixed-point observations of workers’ movements health level self-checks. We have also established a health accidents” status accounted for more than half of all Environment Control Department, who takes responsibility for consultation system, which can be accessed at any time by accidents, suggesting that safety activities had fallen into a rut matters relating to health, safety and the environment, coordinates employees and their families via telephone or our website. and that safety awareness had dropped due to long periods health and safety management for the SMM Group. Activities at the Oji-kan Facility Self-checks have continued in FY2013. Based on the results, without accidents. Furthermore, similar accidents resulting The general manager of each workplace is appointed health The SMM Group’s experience-based training facility, the training was conducted for guidance in respect to workplace from unsafe activities keep on occurring. and safety manager for that workplace, as provided for under Oji-kan, commenced hazard simulation courses in January communication. Practical training was implemented for In 2014, we will advance key initiatives to address these the Japanese Industrial Safety and Health Act. Health and 2010. By April 30, 2014, a period of roughly four years, a total managers and supervisors to enhance care of employees issues, namely identification of accident risks in priority areas; safety management is advanced within the organization of 4,200 Japan-based SMM Group employees and 3,000 within the organization, along with basic courses for regular strengthening of residual risk management; enhancement of according to instructions given by the health and safety contractor employees had undergone training there. In 2013, employees. A “return to work trial” system was also education for less-experienced employees; utilization of group manager with the support of the Oji-kan made efforts to increase participant numbers by implemented to help employees who have been on long-term education; and enhancement of safety management for health and safety personnel. starting on-site hazard simulation courses, dispatching staff to leave due to a mental disorder settle back into work life. We contractors. Constructive discussion on ways workplaces. Workplaces also use the Oji-kan’s facilities for are also nurturing in-house mental health care specialists by In the area of health, the Safety & Environment Control to improve health and safety in their own independent safety activities. having human resources personnel obtain industrial counselor Department will implement health patrols at Control Class 3 the workplace takes place during Even overseas workplaces make good use of the Oji-kan. qualifications. workplaces and provide guidance on improvements, which will meetings of the occupational Every year, around 10 employees from Coral Bay Nickel In FY2014, we will continue to improve upon the four cares— center on improvements to work environments. We will health and safety committees  A meeting of health and Corporation (CBNC) in the Philippines visit the facility to take self-care, care provided by the organization, care provided by continue to identify, and take necessary action on, the dangers comprising representatives from safety personnel to share part in hazard simulation programs. The Pogo Mine in Alaska, health staff, and care provided by outside institutions. and hazards of chemical substances while following legislative examples of improvements both labor and management. implemented at each site the United States also sends a number of representatives each developments. In terms of mental health, we are enhancing year to observe the facility and apply what they learn to safety mental health education for regular employees, managers and activities at the mine. Incidence of Occupational Accidents supervisors. Health management will continue to be advanced Tours of the Oji-kan facility The total number of accidents at workplaces in Japan during through implementation of health guidance, consultation and Health and Safety Activities in the Workplace are also provided to other 2013 was 16, an increase from the best safety performance of education by industrial physicians based on health The following are safety-related measures given priority during corporations and outside 11 accidents achieved in 2012. There was, however, only one examination results. 2013. organizations. Every year, a lost-time accident, the best result achieved so far. (1) Entrenchment of work observations1 large number of such There were 14 accidents at overseas workplaces. No fatal (2) Implementation of accident prevention measures in corporations and accidents occurred at workplaces in Japan or overseas. There priority areas organizations come to visit the  On-site hazard were no instances of occupational illnesses at workplaces (3) Implementation of group education for individual facility. simulation—suspended load either in Japan or overseas. Note that this data is based on the swinging hazard simulation workplaces calendar year, January to December 2013.

My Way of Dengue fever has been on the rise in neighboring regions in recent years and as a member of the team for My Way of I love making improvements to the workplace and submit numerous improvement proposals throughout the year. Doing Good advancing measures in the community to eradicate the disease, I have been promoting cleanup activities to Doing Good When I joined Sumiko Kunitomi Denshi, 5S2 activities were still not underway, but I feel the mood inside the improve health conditions in the community. Not only that, I also organize education for local public servants company has become much brighter since they began. Through these efforts, I hope to implement a variety of and health officers. For me personally, community contribution activities are a very fulfilling job, and I believe improvements to make the company an even more cheerful place. they are beneficial to both the local community and CBNC. 2. 5S: A platform of activities for managing the workplace, consisting of seiri (sorting), seiton (ordering), Hamera Gabinete CBNC Tomomi Mizuno Sumiko Kunitomi Denshi Co., Ltd. seiso (cleaning), seiketsu (maintaining cleanliness), and shitsuke (maintaining discipline)

57 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 58 Occupational Health and Safety Occupational Health and Safety

(4) Strengthening of education for less-experienced ■ Data on Occupational Accidents in Japan Anzen Dojyo Basic Approach employees SMM non-consolidated Year Group companies Total SMM engages in a wide range of activities in line with its CSR (5) Enhance safety management for contractors The Safety & Environment Control Department has been (directly controlled) Policy, which states, “According safety the highest priority, To raise the effectiveness of measures, we implement running the SMM Anzen Dojyo (lit. safety training center), to All accidents 5 11 16 Fatalities 0 0 0 activities with the focus narrowed down to the prevention of 2013 SMM shall provide safe, comfortable working environments help stimulate safety activities and safety education at Lost time accidents 0 1 1 and seek to eliminate occupational accidents.” accidents peculiar to that workplace based on analysis of workplaces, since 2013. The purpose of the Anzen Dojyo is to Working days lost 204 97 301 The Vision for 2020 includes, “a company that accords safety accidents which have occurred. develop human resources and safety leaders who will be core All accidents 3 8 11 Fatalities 0 0 0 the highest priority and provides comfortable working Safety activities are also advanced by employees of the safety promoters at each workplace. These safety leaders will 2012 Lost time accidents environments,” stipulating the following four specific targets. SMM Group together with contractors. head efforts to continually raise the standard of safety activities 0 3 3 Working days lost 9 172 181 Health-related activities during 2013 were pursued under the  No occupational accidents throughout the SMM at workplaces. All accidents 5 11 16 Safety following themes. Fatalities 0 0 0 Group (including business partners) The Anzen Dojyo provides education about the mechanisms 2011 (1) Steady implementation and continuation of work by which accidents occur, ways to lower risk, and other Lost time accidents 1 4 5  Zero incidence of occupational disease Physical  environment improvements aspects of safety based on results from analysis of accidents Working days lost 313 60 373 Create workplaces where protective equipment All accidents Health (earplugs/masks) is unnecessary 8 11 19 (2) Protective equipment usage management and upkeep which have occurred within the SMM Group in the past. Safety Fatalities 0 0 0 2010 (3) Enhancing awareness of, and communication about, the Lost time accidents Mental  A vibrant company whose workforce is physically leaders will return to their workplaces with their newly acquired 2 3 5 Health and mentally healthy dangers and hazards of chemical substances knowledge and put it to use, for example in group education Working days lost 98 27 125 (4) Compliance with stricter work environment regulations and safety activities. All accidents 5 9 14 Safety-related activities are advanced under a basic policy to Fatalities 0 0 0 relating to chemical substances 2009 “nurture a safety culture and ensure thorough safety Lost time accidents 3 1 4 management at all business sites and Group companies” in (5) Care as part of health management (e.g. health Working days lost 453 1 454 guidance for employees showing signs of conditions) order to provide safety assurance and to realize the CSR * Boundary: SMM, subsidiaries in Japan, Nippon Ketjen Co., Ltd., N.E. Chemcat Corporation, Policy and Vision for 2020. A labor-management agreement pertaining to dust, visual and the Mie District Div. of Mitsui Sumitomo Metal Mining Brass & Copper Co., Ltd. display terminals (VDT), lead and noise sets forth procedures * No fatal accidents have occurred at SMM or a group company since 2004 Health-related activities include ascertaining levels of dust, * Working days lost also includes working days lost in the year of reporting for workers involved lead, noise, specified chemicals and organic solvents within for preventing illness and taking action when illnesses occur. in accidents during the previous year work environments, making improvements to those In regard to indium compounds, which were added as specified chemical substances in October 2012, procedures environments where necessary, and enhancing occupational  A seminar at the Anzen Dojyo (Oji-kan)  Example of illustrations Issues and Targets health management. and improvements were being advanced in accordance with from training materials industry guidelines even before the regulations were One safety issue is that less-experienced employees were introduced. With the addition of cobalt as a specified chemical involved in around 60% of all accidents in 2013, up from substance, improvements to work environments are required at Mental Health Care around 40% in 2012. This is thought to be due to inadequate Occupational Health and Safety some workplaces and priority is currently placed on carrying Initiatives related to mental health care for employees include education in workplaces about residual risks. Another issue is Management Frameworks out those improvements. mental health care training by specialized institutions and that workplaces which had previously maintained “zero The executive officer with jurisdiction over the Safety & 1. Work observations: Fixed-point observations of workers’ movements health level self-checks. We have also established a health accidents” status accounted for more than half of all Environment Control Department, who takes responsibility for consultation system, which can be accessed at any time by accidents, suggesting that safety activities had fallen into a rut matters relating to health, safety and the environment, coordinates employees and their families via telephone or our website. and that safety awareness had dropped due to long periods health and safety management for the SMM Group. Activities at the Oji-kan Facility Self-checks have continued in FY2013. Based on the results, without accidents. Furthermore, similar accidents resulting The general manager of each workplace is appointed health The SMM Group’s experience-based training facility, the training was conducted for guidance in respect to workplace from unsafe activities keep on occurring. and safety manager for that workplace, as provided for under Oji-kan, commenced hazard simulation courses in January communication. Practical training was implemented for In 2014, we will advance key initiatives to address these the Japanese Industrial Safety and Health Act. Health and 2010. By April 30, 2014, a period of roughly four years, a total managers and supervisors to enhance care of employees issues, namely identification of accident risks in priority areas; safety management is advanced within the organization of 4,200 Japan-based SMM Group employees and 3,000 within the organization, along with basic courses for regular strengthening of residual risk management; enhancement of according to instructions given by the health and safety contractor employees had undergone training there. In 2013, employees. A “return to work trial” system was also education for less-experienced employees; utilization of group manager with the support of the Oji-kan made efforts to increase participant numbers by implemented to help employees who have been on long-term education; and enhancement of safety management for health and safety personnel. starting on-site hazard simulation courses, dispatching staff to leave due to a mental disorder settle back into work life. We contractors. Constructive discussion on ways workplaces. Workplaces also use the Oji-kan’s facilities for are also nurturing in-house mental health care specialists by In the area of health, the Safety & Environment Control to improve health and safety in their own independent safety activities. having human resources personnel obtain industrial counselor Department will implement health patrols at Control Class 3 the workplace takes place during Even overseas workplaces make good use of the Oji-kan. qualifications. workplaces and provide guidance on improvements, which will meetings of the occupational Every year, around 10 employees from Coral Bay Nickel In FY2014, we will continue to improve upon the four cares— center on improvements to work environments. We will health and safety committees  A meeting of health and Corporation (CBNC) in the Philippines visit the facility to take self-care, care provided by the organization, care provided by continue to identify, and take necessary action on, the dangers comprising representatives from safety personnel to share part in hazard simulation programs. The Pogo Mine in Alaska, health staff, and care provided by outside institutions. and hazards of chemical substances while following legislative examples of improvements both labor and management. implemented at each site the United States also sends a number of representatives each developments. In terms of mental health, we are enhancing year to observe the facility and apply what they learn to safety mental health education for regular employees, managers and activities at the mine. Incidence of Occupational Accidents supervisors. Health management will continue to be advanced Tours of the Oji-kan facility The total number of accidents at workplaces in Japan during through implementation of health guidance, consultation and Health and Safety Activities in the Workplace are also provided to other 2013 was 16, an increase from the best safety performance of education by industrial physicians based on health The following are safety-related measures given priority during corporations and outside 11 accidents achieved in 2012. There was, however, only one examination results. 2013. organizations. Every year, a lost-time accident, the best result achieved so far. (1) Entrenchment of work observations1 large number of such There were 14 accidents at overseas workplaces. No fatal (2) Implementation of accident prevention measures in corporations and accidents occurred at workplaces in Japan or overseas. There priority areas organizations come to visit the  On-site hazard were no instances of occupational illnesses at workplaces (3) Implementation of group education for individual facility. simulation—suspended load either in Japan or overseas. Note that this data is based on the swinging hazard simulation workplaces calendar year, January to December 2013.

My Way of Dengue fever has been on the rise in neighboring regions in recent years and as a member of the team for My Way of I love making improvements to the workplace and submit numerous improvement proposals throughout the year. Doing Good advancing measures in the community to eradicate the disease, I have been promoting cleanup activities to Doing Good When I joined Sumiko Kunitomi Denshi, 5S2 activities were still not underway, but I feel the mood inside the improve health conditions in the community. Not only that, I also organize education for local public servants company has become much brighter since they began. Through these efforts, I hope to implement a variety of and health officers. For me personally, community contribution activities are a very fulfilling job, and I believe improvements to make the company an even more cheerful place. they are beneficial to both the local community and CBNC. 2. 5S: A platform of activities for managing the workplace, consisting of seiri (sorting), seiton (ordering), Hamera Gabinete CBNC Tomomi Mizuno Sumiko Kunitomi Denshi Co., Ltd. seiso (cleaning), seiketsu (maintaining cleanliness), and shitsuke (maintaining discipline)

57 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 58 Occupational Health Initiatives in the Six Key CSR Areas and Safety Occupational Health and Safety

Safety Initiatives Safety Initiatives at the Harima Smelter Health Initiatives We are working toward zero occupational accidents throughout the SMM Group (including contractors) by We are aiming to establish workplaces where there establishing safe workplaces all over the world. is zero incidence of occupational disease and protective equipment (earplugs/masks) is unnecessary. Initiatives at the Pogo Mine Health Initiatives at Sumitomo Metal Mining Siporex

Instruction at the Anzen Dojyo (Special safety training program)

The Harima Smelter is home to two of SMM’s businesses: our zinc smelting business with a history spanning 50 years, and our nickel sulfate business, which only commenced operations in 2014. Zinc smelting is a drying process dealing with large volumes 1 of high-temperature materials and melts . In addition to Fans and a dust counter (center) used to measure dust particles. promoting greater inherent safety in equipment to prevent Sources of dust are covered by sheets. accidents from occurring, we also get veteran workers dispatched to the SMM Anzen Dojyo to educate individual The name “Siporex” is derived from the phrase “Silica Pore employees using specific yet plain language about the types Excellent,” and refers to being composed of silica. The dust Safety meeting at the Pogo Mine Ore Dressing Section of unsafe behavior they have learned through their experience, generated here is subject to work environment measurement. and about means for improving safety communication based Previously, this was tied purely to the control classes for work In conducting activities at the Pogo Mine, safety is regarded as on reporting, communicating and consulting at points of environments, but not nearly enough consideration was given, paramount importance for everyone. Needless to say, in order variation. Through these safety activities, the awareness of and countermeasures did not necessarily lead to results. At to carry out operations safely, each individual worker must use employees toward safety is gradually changing, and our safety our plant, workers are required to wear masks from Control protective equipment properly, but they must also understand performance is also improving. Class 2, but in order to improve their work environment, we how important their actions are for both themselves and their The nickel sulfate business uses a wet process developed have carried out three key activities. First, in order to (1) families. With this in mind, we conduct monthly safety through experience at the Besshi-Niihama District Division’s strengthen the technical consideration of measurement results, campaigns for the purpose of repeatedly raising awareness in nickel refinery. The facility incorporates various safety in addition to receiving technical guidance from the Safety & the workplace for potential risks. During these campaigns, Chris Kennedy measures based on past experience. Furthermore, during the Environment Control Department, I too acquired the management discusses with all levels of employees about General Manager almost one year of construction, by carrying out thorough qualifications of a working environment measurement expert, such topics as securing safety systems and preventing Sumitomo Metal Mining Pogo LLC safety management in collaboration with our business and in so doing, understood the technical implications of the recurrent injuries, and communicates the results of these partners, we were able to successfully complete construction control classes. Based on that consideration, we (2) discussions to all employees. Through these activities, the risk with zero accidents. implemented measures based on on-site observations and awareness of employees was clearly heightened. We are committed to nurturing a culture of safety at new confirmed the effects of these based on independent In addition, by participating in various other meetings and business facilities, while fusing together our many years of measurements. Moreover, rather than waiting for the half-yearly engaging in direct dialog with employees, and by undertaking experience and our state-of-the-art safety equipment. work environment measurements, we proceeded to verify the on site checks as part of their inspections, management and improvements and measures, and (3) reviewed these at the the Health, Safety and Loss Control Manager are also actively 1. Melt: High-temperature molten slag and molten metal produced from refining furnaces Dust Control Working Group. As a result, since the second half involved in the early detection, discussion and measures for of 2013, the number of Control Class 3 workplaces has gone any rule violations. Through these activities, we are working to from two to zero. Measures for the remaining two Control Class create a workplace where all employees become safe workers Steve Steel 2 workplaces are also apparent, who think for themselves. For example, if workers notice Health, Safety and Loss Control Manager meaning that it will not be long something, such as dangerous behavior by another employee Sumitomo Metal Mining Pogo LLC before we achieve Control Class or doubts about the safety of their own work, they are able to 1 for all workplaces. report it to their supervisors.

Masaru Takebayashi Yoshimichi Aono Deputy General Manager Manager of Production Sect, Mie Plant Harima Smelter, Non-ferrous Metals Div. Sumitomo Metal Mining Siporex Co., Ltd.

My Way of My Way of Doing Good Three years ago, I began climbing the 100 steps from the train platform for the Yokosuka Line on basement level Doing Good Older people often strike up conversations with me in a variety of situations. By asking about their life 4 to the ticket gate on the ground level at the JR Shimbashi Station, which is the station closest to work. experiences in a casual conversation, I have been able to acquire lots of knowledge and ideas, and I have really Although my original intent was to promote my own health, since I do not use the escalator, I feel like I am also felt just how important that inter-generational relationships between people are. I will continue to make a point of doing my bit (albeit small) for the conservation of energy and the alleviation of congestion. Nowadays, I routinely actively listening to people when approached by them. use stairs, even on my days off. Yoshikazu Kitamura Purchasing Dept. Mitsuki Odawara Hishikari Mine Dept.

59 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 60 Occupational Health Initiatives in the Six Key CSR Areas and Safety Occupational Health and Safety

Safety Initiatives Safety Initiatives at the Harima Smelter Health Initiatives We are working toward zero occupational accidents throughout the SMM Group (including contractors) by We are aiming to establish workplaces where there establishing safe workplaces all over the world. is zero incidence of occupational disease and protective equipment (earplugs/masks) is unnecessary. Initiatives at the Pogo Mine Health Initiatives at Sumitomo Metal Mining Siporex

Instruction at the Anzen Dojyo (Special safety training program)

The Harima Smelter is home to two of SMM’s businesses: our zinc smelting business with a history spanning 50 years, and our nickel sulfate business, which only commenced operations in 2014. Zinc smelting is a drying process dealing with large volumes 1 of high-temperature materials and melts . In addition to Fans and a dust counter (center) used to measure dust particles. promoting greater inherent safety in equipment to prevent Sources of dust are covered by sheets. accidents from occurring, we also get veteran workers dispatched to the SMM Anzen Dojyo to educate individual The name “Siporex” is derived from the phrase “Silica Pore employees using specific yet plain language about the types Excellent,” and refers to being composed of silica. The dust Safety meeting at the Pogo Mine Ore Dressing Section of unsafe behavior they have learned through their experience, generated here is subject to work environment measurement. and about means for improving safety communication based Previously, this was tied purely to the control classes for work In conducting activities at the Pogo Mine, safety is regarded as on reporting, communicating and consulting at points of environments, but not nearly enough consideration was given, paramount importance for everyone. Needless to say, in order variation. Through these safety activities, the awareness of and countermeasures did not necessarily lead to results. At to carry out operations safely, each individual worker must use employees toward safety is gradually changing, and our safety our plant, workers are required to wear masks from Control protective equipment properly, but they must also understand performance is also improving. Class 2, but in order to improve their work environment, we how important their actions are for both themselves and their The nickel sulfate business uses a wet process developed have carried out three key activities. First, in order to (1) families. With this in mind, we conduct monthly safety through experience at the Besshi-Niihama District Division’s strengthen the technical consideration of measurement results, campaigns for the purpose of repeatedly raising awareness in nickel refinery. The facility incorporates various safety in addition to receiving technical guidance from the Safety & the workplace for potential risks. During these campaigns, Chris Kennedy measures based on past experience. Furthermore, during the Environment Control Department, I too acquired the management discusses with all levels of employees about General Manager almost one year of construction, by carrying out thorough qualifications of a working environment measurement expert, such topics as securing safety systems and preventing Sumitomo Metal Mining Pogo LLC safety management in collaboration with our business and in so doing, understood the technical implications of the recurrent injuries, and communicates the results of these partners, we were able to successfully complete construction control classes. Based on that consideration, we (2) discussions to all employees. Through these activities, the risk with zero accidents. implemented measures based on on-site observations and awareness of employees was clearly heightened. We are committed to nurturing a culture of safety at new confirmed the effects of these based on independent In addition, by participating in various other meetings and business facilities, while fusing together our many years of measurements. Moreover, rather than waiting for the half-yearly engaging in direct dialog with employees, and by undertaking experience and our state-of-the-art safety equipment. work environment measurements, we proceeded to verify the on site checks as part of their inspections, management and improvements and measures, and (3) reviewed these at the the Health, Safety and Loss Control Manager are also actively 1. Melt: High-temperature molten slag and molten metal produced from refining furnaces Dust Control Working Group. As a result, since the second half involved in the early detection, discussion and measures for of 2013, the number of Control Class 3 workplaces has gone any rule violations. Through these activities, we are working to from two to zero. Measures for the remaining two Control Class create a workplace where all employees become safe workers Steve Steel 2 workplaces are also apparent, who think for themselves. For example, if workers notice Health, Safety and Loss Control Manager meaning that it will not be long something, such as dangerous behavior by another employee Sumitomo Metal Mining Pogo LLC before we achieve Control Class or doubts about the safety of their own work, they are able to 1 for all workplaces. report it to their supervisors.

Masaru Takebayashi Yoshimichi Aono Deputy General Manager Manager of Production Sect, Mie Plant Harima Smelter, Non-ferrous Metals Div. Sumitomo Metal Mining Siporex Co., Ltd.

My Way of My Way of Doing Good Three years ago, I began climbing the 100 steps from the train platform for the Yokosuka Line on basement level Doing Good Older people often strike up conversations with me in a variety of situations. By asking about their life 4 to the ticket gate on the ground level at the JR Shimbashi Station, which is the station closest to work. experiences in a casual conversation, I have been able to acquire lots of knowledge and ideas, and I have really Although my original intent was to promote my own health, since I do not use the escalator, I feel like I am also felt just how important that inter-generational relationships between people are. I will continue to make a point of doing my bit (albeit small) for the conservation of energy and the alleviation of congestion. Nowadays, I routinely actively listening to people when approached by them. use stairs, even on my days off. Yoshikazu Kitamura Purchasing Dept. Mitsuki Odawara Hishikari Mine Dept.

59 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 60 Initiatives in the Six Key CSR Areas Basic Approach

Prior to the launch of CSR activities at SMM in 2008, deliberations were held relating to the SMM Group Corporate Philosophy, Group Management Vision, CSR Policy and Vision for 2020, and the following entities with an interest in Stakeholder Communication SMM’s activities were identified as stakeholders: customers, shareholders, employees, local communities, creditors, business partners, citizen groups, and the government. SMM aims to maximize its corporate value and has established targets that specify the “ideal company” for each stakeholder category. Vision  for 2020 A company that is open to communication with stakeholder groups worldwide

● SMM and stakeholders engage in dialogue in good faith with respect for each party’s standpoint ● SMM carries out transparent information disclosure, and attempts to make explanations to the greatest possible extent in order to Aiming to achieve the communications conditions shown on the right achieve mutual understanding ● Key themes: transparency, accountability, attentiveness, and dialogue

Target FY2013 Achievements Challenges FY2014 Plan

● Employees ● Making a better company and better ● Plan and create educational materials about CSR through cooperation with • Employee awareness surveys: Conducted the second employee awareness survey in February workplaces using results of meetings of CSR communication support officers* 2013. Provided briefings to management and held feedback seminars at each branch office employee awareness surveys ● Revamp and enhance the in-house bulletin, which is a vital tool for communicating from August. Also, communicated survey results to employees through the in-house bulletin. ● Explaining progress of the 3-year with employees, after ascertaining the opinions and requests of employees through Tabulated and analyzed data will be used to make the company and workplaces better. business plan to employees through a reader questionnaire • Communication of the 3-year business plan: Created an introductory video for the 2012 3-Year the in-house bulletin ● Distribute the company’s 2014 introductory video, Nickel seicho senryaku (Nickel Business Plan and showed it at the 2013 ordinary general meeting of shareholders. Also Growth Strategy), to business locations and deepen understanding about the 3-year distributed a DVD to business locations and group companies and showed it at each site. business plan * There are 15 CSR communication support officers, assigned from each business and Head Office division, who are responsible for core communication activities about CSR. They consider the ideal form of CSR activities in the SMM Group and put together and propose measures, such as education or improvements to workplace culture, as a way of promoting CSR activity. They also support activities for promoting CSR activity undertaken in each workplace.

● Local communities ● Deliberation on new activities for ● Include information on activity examples at sites in different regions in the in-house Introduced actual examples of community contribution and communication with local communicating with local bulletin to help educate employees Create opportunities for communities from workplaces in Japan and overseas through the in-house bulletin communities using other workplaces’ examples as reference face-to-face dialogue with stakeholders ● Investors ● Deliberation on initiatives with a ● Continue plant tours for institutional investors to promote greater understanding • Implemented a tour of the Hishikari Mine for institutional investors in March 2014. Explained wider range of targets, such as about the SMM Group’s initiatives in the area of business operations and CSR environmental measures in place at operating mines and management of suspended or closed tours for CSR-related personnel activities mines. from institutional investors • Participated in an investor relations event hosted by the Niihama Chamber of Commerce and Industry, providing an overview of SMM’s business to general investors

● Citizen groups ● Efforts to build relationships based ● Continue regular communication with related NGOs to build relationships based on • Held regular meetings with related NGOs to exchange information on mutual trust with NGOs mutual trust • Hosted CSR lectures by outside lecturers to learn about progressive initiatives for cooperation ● Continuation of study sessions to ● Hold study sessions on an ongoing basis to promote greater understanding about with NGOs and CSR activities raise the standard of CSR activities CSR activities and cooperation with NGOs

● Other ● Communication of the social media ● Analyze in-house evaluations of the results of outside surveys to learn about Established a set of social media guidelines setting out basic rules for employee’s guidelines society’s demands and issues concerning SMM’s CSR initiatives personal use of social media

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 The mineral resources business and smelting and refining business are businesses with a potentially large impact on In FY2013, we primarily worked to strengthen communication with three stakeholder categories—employees, local communities and the environment, and that is why it is extremely important to appropriately engage in shareholders and investors, and citizen groups. We endeavored to build relationships with each stakeholder communication with local people to gain the understanding and backing of the community. On this point, it is highly category, for example through employee awareness surveys, plant tours and strategy briefings for admirable that individual operating locations are building relationships of trust according to the local circumstances, shareholders and investors, and the hosting of in-house lectures with the cooperation of NGOs. These kinds as demonstrated by Taganito HPAL Nickel Corporation (THPAL) and Coral Bay Nickel Corporation (CBNC). Holding of initiatives have even been recognized by outside parties, as illustrated by our winning a Best IR Award regular meetings with NGOs is also important as a way to quickly come to terms with potential risks and can be (hosted by the Japan Investor Relations Association). admired as an indication of SMM’s openness toward the outside. In regard to dialogue with individual stakeholders, I believe SMM is already achieving a high standard. Response to Stakeholder Comments We have a system in place whereby case examples of initiatives for communicating with the community are In your view, what does society require in regard to stakeholder communication? regularly compiled through written surveys and shared with all facilities, for example via the in-house bulletin. First, I think it is important for Head Office to have an accurate grasp of communication activities implemented at While difficulties do arise due to the varying cultures, traditions and other background aspects from region to each facility and to strike a balance between adapting to local circumstances and achieving company-wide region, I hope we can deploy best practices across the organization, where applicable, and strengthen consistency. SMM does not simply react passively to demands made by the local community, but takes the initiative dialogue. in its community contributions, even looking beyond the closure of a mine, for example, in its development of industry To earn greater trust from society, it is also extremely important that we undertake appropriate disclosure of and education of human resources. It naturally follows that properly communicating this will increase society’s trust. non-financial information. There is extensive demand among shareholders and investors in Europe and other Takeshi Mizuguchi Even in communication with shareholders, investors and employees, properly explaining the significance and value overseas locations for integrated reporting, which involves reporting on current business activities and future Takashi Ito Professor, Faculty of Economics, Chairman, Communication Subcommittee; Takasaki City University of Economics of these activities, over and above simply introducing them, can assist in the acquisition of stable, long-term investors business strategy, as well as on the relevance of activities in terms of both financial and non-financial terms. Managing Executive Officer; and greater awareness among employees. You already adequately engage in integrated thinking, so perhaps SMM is also currently looking into realizing integrated reporting. General Manager, PR and IR Dept. integrated reporting is also now in order. 61 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 62 Initiatives in the Six Key CSR Areas Basic Approach

Prior to the launch of CSR activities at SMM in 2008, deliberations were held relating to the SMM Group Corporate Philosophy, Group Management Vision, CSR Policy and Vision for 2020, and the following entities with an interest in Stakeholder Communication SMM’s activities were identified as stakeholders: customers, shareholders, employees, local communities, creditors, business partners, citizen groups, and the government. SMM aims to maximize its corporate value and has established targets that specify the “ideal company” for each stakeholder category. Vision  for 2020 A company that is open to communication with stakeholder groups worldwide

● SMM and stakeholders engage in dialogue in good faith with respect for each party’s standpoint ● SMM carries out transparent information disclosure, and attempts to make explanations to the greatest possible extent in order to Aiming to achieve the communications conditions shown on the right achieve mutual understanding ● Key themes: transparency, accountability, attentiveness, and dialogue

Target FY2013 Achievements Challenges FY2014 Plan

● Employees ● Making a better company and better ● Plan and create educational materials about CSR through cooperation with • Employee awareness surveys: Conducted the second employee awareness survey in February workplaces using results of meetings of CSR communication support officers* 2013. Provided briefings to management and held feedback seminars at each branch office employee awareness surveys ● Revamp and enhance the in-house bulletin, which is a vital tool for communicating from August. Also, communicated survey results to employees through the in-house bulletin. ● Explaining progress of the 3-year with employees, after ascertaining the opinions and requests of employees through Tabulated and analyzed data will be used to make the company and workplaces better. business plan to employees through a reader questionnaire • Communication of the 3-year business plan: Created an introductory video for the 2012 3-Year the in-house bulletin ● Distribute the company’s 2014 introductory video, Nickel seicho senryaku (Nickel Business Plan and showed it at the 2013 ordinary general meeting of shareholders. Also Growth Strategy), to business locations and deepen understanding about the 3-year distributed a DVD to business locations and group companies and showed it at each site. business plan * There are 15 CSR communication support officers, assigned from each business and Head Office division, who are responsible for core communication activities about CSR. They consider the ideal form of CSR activities in the SMM Group and put together and propose measures, such as education or improvements to workplace culture, as a way of promoting CSR activity. They also support activities for promoting CSR activity undertaken in each workplace.

● Local communities ● Deliberation on new activities for ● Include information on activity examples at sites in different regions in the in-house Introduced actual examples of community contribution and communication with local communicating with local bulletin to help educate employees Create opportunities for communities from workplaces in Japan and overseas through the in-house bulletin communities using other workplaces’ examples as reference face-to-face dialogue with stakeholders ● Investors ● Deliberation on initiatives with a ● Continue plant tours for institutional investors to promote greater understanding • Implemented a tour of the Hishikari Mine for institutional investors in March 2014. Explained wider range of targets, such as about the SMM Group’s initiatives in the area of business operations and CSR environmental measures in place at operating mines and management of suspended or closed tours for CSR-related personnel activities mines. from institutional investors • Participated in an investor relations event hosted by the Niihama Chamber of Commerce and Industry, providing an overview of SMM’s business to general investors

● Citizen groups ● Efforts to build relationships based ● Continue regular communication with related NGOs to build relationships based on • Held regular meetings with related NGOs to exchange information on mutual trust with NGOs mutual trust • Hosted CSR lectures by outside lecturers to learn about progressive initiatives for cooperation ● Continuation of study sessions to ● Hold study sessions on an ongoing basis to promote greater understanding about with NGOs and CSR activities raise the standard of CSR activities CSR activities and cooperation with NGOs

● Other ● Communication of the social media ● Analyze in-house evaluations of the results of outside surveys to learn about Established a set of social media guidelines setting out basic rules for employee’s guidelines society’s demands and issues concerning SMM’s CSR initiatives personal use of social media

Expectations for the SMM Group Subcommittee Chairman’s Comment

What is your evaluation of the SMM Group’s activities during FY2013? Progress in FY2013 The mineral resources business and smelting and refining business are businesses with a potentially large impact on In FY2013, we primarily worked to strengthen communication with three stakeholder categories—employees, local communities and the environment, and that is why it is extremely important to appropriately engage in shareholders and investors, and citizen groups. We endeavored to build relationships with each stakeholder communication with local people to gain the understanding and backing of the community. On this point, it is highly category, for example through employee awareness surveys, plant tours and strategy briefings for admirable that individual operating locations are building relationships of trust according to the local circumstances, shareholders and investors, and the hosting of in-house lectures with the cooperation of NGOs. These kinds as demonstrated by Taganito HPAL Nickel Corporation (THPAL) and Coral Bay Nickel Corporation (CBNC). Holding of initiatives have even been recognized by outside parties, as illustrated by our winning a Best IR Award regular meetings with NGOs is also important as a way to quickly come to terms with potential risks and can be (hosted by the Japan Investor Relations Association). admired as an indication of SMM’s openness toward the outside. In regard to dialogue with individual stakeholders, I believe SMM is already achieving a high standard. Response to Stakeholder Comments We have a system in place whereby case examples of initiatives for communicating with the community are In your view, what does society require in regard to stakeholder communication? regularly compiled through written surveys and shared with all facilities, for example via the in-house bulletin. First, I think it is important for Head Office to have an accurate grasp of communication activities implemented at While difficulties do arise due to the varying cultures, traditions and other background aspects from region to each facility and to strike a balance between adapting to local circumstances and achieving company-wide region, I hope we can deploy best practices across the organization, where applicable, and strengthen consistency. SMM does not simply react passively to demands made by the local community, but takes the initiative dialogue. in its community contributions, even looking beyond the closure of a mine, for example, in its development of industry To earn greater trust from society, it is also extremely important that we undertake appropriate disclosure of and education of human resources. It naturally follows that properly communicating this will increase society’s trust. non-financial information. There is extensive demand among shareholders and investors in Europe and other Takeshi Mizuguchi Even in communication with shareholders, investors and employees, properly explaining the significance and value overseas locations for integrated reporting, which involves reporting on current business activities and future Takashi Ito Professor, Faculty of Economics, Chairman, Communication Subcommittee; Takasaki City University of Economics of these activities, over and above simply introducing them, can assist in the acquisition of stable, long-term investors business strategy, as well as on the relevance of activities in terms of both financial and non-financial terms. Managing Executive Officer; and greater awareness among employees. You already adequately engage in integrated thinking, so perhaps SMM is also currently looking into realizing integrated reporting. General Manager, PR and IR Dept. integrated reporting is also now in order. 61 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 62 Stakeholder Communication Relations with Employees Relations with Shareholders and Investors

Basic Approach Labor-management Relations Basic Approach Communication with Individual Investors The SMM Group aims to create work environments that Workers’ unions formed at SMM branch offices and SMM strives to carry out fair and understandable SMM has established a section for individual investors in allow employees to remain proud of where they work and facilities of SMM Group companies in Japan carry out disclosure of information required by shareholders and the company website and endeavors to disclose IR what they do. We are putting systems in place for tapping activity under the umbrella of the Federation of Sumitomo parties thinking about purchasing in SMM shares. information in an accessible manner. The website the opinions of employees and applying them to Metal Mining Workers Union (Sumikoren). In principle, all Information necessary for investors is made available on provides data that provides a better understanding of our management. regular employees join workers’ unions in accordance the SMM website, including business activities, earnings, business, and also includes information such as materials with union shop agreements. Overseas, three financial data, and outlines and progress updates of aimed at institutional investors and Annual Reports. Employee Awareness Survey consolidated subsidiaries have workers’ unions. As of 3-year business plans and other growth strategies. The We also respond to a variety of telephone and email March 31, 2014, around 17% of employees belonged to Report for Shareholders is also sent out to shareholders inquiries from individual shareholders, which is a valuable To promote communication with employees, who are workers’ unions at overseas consolidated subsidiaries. In twice a year to report on financial results for the full year opportunity for direct communication. important stakeholders, and create a better company and order to build up healthy labor-management relations or half year and the progress of business strategies. workplaces, SMM carries out employee awareness based on mutual trust, in which company and union We have also formulated an IR policy to serve as a set surveys through a specialized outside organization. Feedback from Shareholders and Investors to mutually respect the other party’s position, of guidelines for adequate engagement in IR activity. This Management Following on from the first survey in 2010, a second labor-management council meetings, or labor-management policy sets standards for information disclosure and Opinion and requests received through communication survey was conducted in March 2013. The aims of the discussions, are held at least once a month with unions at disclosure methods, and is available for public viewing on with institutional and individual investors in Japan and survey were to quantitatively determine how employee each branch office or group company. The Central the company website. overseas are regularly reported to management and awareness had changed over the three years since the Labor-Management Conference, a meeting between SMM Corporate governance refers to the frameworks in place applied to administration of the company. last survey and what kind of awareness employees management and executives of Sumikoren unions, is held which give order to corporate activity for the purpose of possessed as they went about their jobs, and then to once a year around March. maximizing the value of the corporation and ensuring apply that knowledge to the development of measures for We also implement questionnaires to ascertain sound business. SMM views corporate governance as General Meeting of Shareholders creating a better company and workplaces. As with the conditions relating to the establishment of workers’ unions one of the most important management themes. We work The General Meeting of Shareholders is an opportunity to previous survey, all of the roughly 3,000 employees of overseas and actually visit overseas business facilities in to build and maintain an optimal system of business engage in communication with shareholders. Efforts are business locations directly controlled by SMM were order to observe the labor-management situation in those administration, pursuing transparency and efficiency of being made to invigorate the meeting, for example by surveyed. There were a total of 118 questions, comprising locations and to exchange information. management in order to continue being a company that providing early notice of meetings and through the use of the same 113 questions asked in the previous survey, and Various committees comprising members from labor earns the trust of shareholders and all other stakeholders, electronic voting. five additional questions relating to women’s careers. The and management are set up to tackle matters deemed and meets their expectations. SMM aims for a general meeting that shareholders can response rate was 97.0%, higher than the previous important to both sides so that the views of both labor and follow easily, using methods such as incorporation of survey, which suggests a high level of interest in the management can be reflected in revisions to, or the Investor Relations video into presentations on business performance. survey among employees. additional formulation of, a wide range of measures. In the Notices of meetings and reports are available on the SMM Survey results were reported to top management, case of business reforms expected to have a significant SMM holds twice yearly Business Strategy Progress website. general managers of Head Office divisions, general impact on employees, considerations include providing Briefing Sessions in which the president provides managers of business divisions, and workers’ unions over explanations to institutional investors and securities sufficient advance notice. As a result of these efforts, no Issues and Targets eight feedback briefing sessions from August. plant closures of a week or more due to strikes or other analysts in person following the announcement of full-year In 2013, SMM received a Best IR Award from the Japan Additionally, feedback seminars were held at seven action were reported during FY2013 within the entire SMM and second quarter results. Investor Relations Association. One IR Grand Prix winner directly-controlled business locations in September and Group—both in Japan and overseas— and there were no The PR and IR Department also holds earnings and five Best IR Award recipients were selected from the October. Targeting management at each facility, these serious infringements upon freedom of association. briefings via teleconference four times a year on days that seminars were used to disclose data for each location, quarterly results are announced. Documents for these 276 entrants. SMM won the same award in 2011. Reasons ascertain outstanding issues for the location, and think briefings are made available on the day via the SMM for SMM’s selection are as follows. about measures for creating better workplaces. For website and can be viewed by all visitors to the site. “Sumitomo Metal Mining received high marks for its employees, survey results and an explanatory article Matters discussed with Sumikoren In addition, a total of around 340 individual meetings efforts to conduct a management strategy solidly founded appeared in the in-house bulletin, Ibuki, in November (during FY2013) include: with institutional investors and securities analysts were on a long term vision and to raise its corporate value. The 2013. held in Japan and overseas in FY2013 to provide a direct Company demonstrates a clearly defined direction for its • Business conditions overview The next step is to implement measures at each communication channel. We also pay visits to institutional future, and provides easy to understand explanations of location based on survey results and while engaging in • Monthly performance figures investors to explain governance of SMM to, and to gain its various projects and the process of achieving its future communication with employees. The results of the latest • Plans relating to business restructuring feedback from, personnel responsible for governance goals. The quality of data collected from within and survey will also be used as a reference in considering and exercising of voting rights. outside of the Company and level of analysis provided measures for promoting CSR in-house. within presentation materials is very high. Combined with this data, opportunities to visit plants have contributed to ■ Shareholder Composition (as of March 31, 2014) an increased understanding of Sumitomo Metal Mining by Treasury stock both analysts and institutional investors. The Company’s 5.1% IR activities have also been praised for their awareness of ‘ESG’ issues and for their detailed explanation of resolutions submitted to general shareholders’ meetings.” SMM also received the Award for Excellence in Individuals Corporate Disclosure in the steel/non-ferrous metal and others 17.7% Financial institutions category from the Security Analysts Association of Japan 28.4% (SAAJ). This makes it three years in succession, from 2011, that we have been selected for the award. By continually enhancing our investor relations activities, we aim to promote even greater understanding Foreign investors of SMM’s strategy and business operations among as 32.7% Securities firms many people as possible.  Feedback seminar  Central Labor-Management Conference 2.9%

Other corporations 13.2%

63 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 64 Stakeholder Communication Relations with Employees Relations with Shareholders and Investors

Basic Approach Labor-management Relations Basic Approach Communication with Individual Investors The SMM Group aims to create work environments that Workers’ unions formed at SMM branch offices and SMM strives to carry out fair and understandable SMM has established a section for individual investors in allow employees to remain proud of where they work and facilities of SMM Group companies in Japan carry out disclosure of information required by shareholders and the company website and endeavors to disclose IR what they do. We are putting systems in place for tapping activity under the umbrella of the Federation of Sumitomo parties thinking about purchasing in SMM shares. information in an accessible manner. The website the opinions of employees and applying them to Metal Mining Workers Union (Sumikoren). In principle, all Information necessary for investors is made available on provides data that provides a better understanding of our management. regular employees join workers’ unions in accordance the SMM website, including business activities, earnings, business, and also includes information such as materials with union shop agreements. Overseas, three financial data, and outlines and progress updates of aimed at institutional investors and Annual Reports. Employee Awareness Survey consolidated subsidiaries have workers’ unions. As of 3-year business plans and other growth strategies. The We also respond to a variety of telephone and email March 31, 2014, around 17% of employees belonged to Report for Shareholders is also sent out to shareholders inquiries from individual shareholders, which is a valuable To promote communication with employees, who are workers’ unions at overseas consolidated subsidiaries. In twice a year to report on financial results for the full year opportunity for direct communication. important stakeholders, and create a better company and order to build up healthy labor-management relations or half year and the progress of business strategies. workplaces, SMM carries out employee awareness based on mutual trust, in which company and union We have also formulated an IR policy to serve as a set surveys through a specialized outside organization. Feedback from Shareholders and Investors to mutually respect the other party’s position, of guidelines for adequate engagement in IR activity. This Management Following on from the first survey in 2010, a second labor-management council meetings, or labor-management policy sets standards for information disclosure and Opinion and requests received through communication survey was conducted in March 2013. The aims of the discussions, are held at least once a month with unions at disclosure methods, and is available for public viewing on with institutional and individual investors in Japan and survey were to quantitatively determine how employee each branch office or group company. The Central the company website. overseas are regularly reported to management and awareness had changed over the three years since the Labor-Management Conference, a meeting between SMM Corporate governance refers to the frameworks in place applied to administration of the company. last survey and what kind of awareness employees management and executives of Sumikoren unions, is held which give order to corporate activity for the purpose of possessed as they went about their jobs, and then to once a year around March. maximizing the value of the corporation and ensuring apply that knowledge to the development of measures for We also implement questionnaires to ascertain sound business. SMM views corporate governance as General Meeting of Shareholders creating a better company and workplaces. As with the conditions relating to the establishment of workers’ unions one of the most important management themes. We work The General Meeting of Shareholders is an opportunity to previous survey, all of the roughly 3,000 employees of overseas and actually visit overseas business facilities in to build and maintain an optimal system of business engage in communication with shareholders. Efforts are business locations directly controlled by SMM were order to observe the labor-management situation in those administration, pursuing transparency and efficiency of being made to invigorate the meeting, for example by surveyed. There were a total of 118 questions, comprising locations and to exchange information. management in order to continue being a company that providing early notice of meetings and through the use of the same 113 questions asked in the previous survey, and Various committees comprising members from labor earns the trust of shareholders and all other stakeholders, electronic voting. five additional questions relating to women’s careers. The and management are set up to tackle matters deemed and meets their expectations. SMM aims for a general meeting that shareholders can response rate was 97.0%, higher than the previous important to both sides so that the views of both labor and follow easily, using methods such as incorporation of survey, which suggests a high level of interest in the management can be reflected in revisions to, or the Investor Relations video into presentations on business performance. survey among employees. additional formulation of, a wide range of measures. In the Notices of meetings and reports are available on the SMM Survey results were reported to top management, case of business reforms expected to have a significant SMM holds twice yearly Business Strategy Progress website. general managers of Head Office divisions, general impact on employees, considerations include providing Briefing Sessions in which the president provides managers of business divisions, and workers’ unions over explanations to institutional investors and securities sufficient advance notice. As a result of these efforts, no Issues and Targets eight feedback briefing sessions from August. plant closures of a week or more due to strikes or other analysts in person following the announcement of full-year In 2013, SMM received a Best IR Award from the Japan Additionally, feedback seminars were held at seven action were reported during FY2013 within the entire SMM and second quarter results. Investor Relations Association. One IR Grand Prix winner directly-controlled business locations in September and Group—both in Japan and overseas— and there were no The PR and IR Department also holds earnings and five Best IR Award recipients were selected from the October. Targeting management at each facility, these serious infringements upon freedom of association. briefings via teleconference four times a year on days that seminars were used to disclose data for each location, quarterly results are announced. Documents for these 276 entrants. SMM won the same award in 2011. Reasons ascertain outstanding issues for the location, and think briefings are made available on the day via the SMM for SMM’s selection are as follows. about measures for creating better workplaces. For website and can be viewed by all visitors to the site. “Sumitomo Metal Mining received high marks for its employees, survey results and an explanatory article Matters discussed with Sumikoren In addition, a total of around 340 individual meetings efforts to conduct a management strategy solidly founded appeared in the in-house bulletin, Ibuki, in November (during FY2013) include: with institutional investors and securities analysts were on a long term vision and to raise its corporate value. The 2013. held in Japan and overseas in FY2013 to provide a direct Company demonstrates a clearly defined direction for its • Business conditions overview The next step is to implement measures at each communication channel. We also pay visits to institutional future, and provides easy to understand explanations of location based on survey results and while engaging in • Monthly performance figures investors to explain governance of SMM to, and to gain its various projects and the process of achieving its future communication with employees. The results of the latest • Plans relating to business restructuring feedback from, personnel responsible for governance goals. The quality of data collected from within and survey will also be used as a reference in considering and exercising of voting rights. outside of the Company and level of analysis provided measures for promoting CSR in-house. within presentation materials is very high. Combined with this data, opportunities to visit plants have contributed to ■ Shareholder Composition (as of March 31, 2014) an increased understanding of Sumitomo Metal Mining by Treasury stock both analysts and institutional investors. The Company’s 5.1% IR activities have also been praised for their awareness of ‘ESG’ issues and for their detailed explanation of resolutions submitted to general shareholders’ meetings.” SMM also received the Award for Excellence in Individuals Corporate Disclosure in the steel/non-ferrous metal and others 17.7% Financial institutions category from the Security Analysts Association of Japan 28.4% (SAAJ). This makes it three years in succession, from 2011, that we have been selected for the award. By continually enhancing our investor relations activities, we aim to promote even greater understanding Foreign investors of SMM’s strategy and business operations among as 32.7% Securities firms many people as possible.  Feedback seminar  Central Labor-Management Conference 2.9%

Other corporations 13.2%

63 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 64 Stakeholder Communication Relations with Customers

The Quality Management Committee works to promote ■ Information on SMM Products Requiring Disclosure by Basic Approach Disclosure of Information on Products and and support the implementation of quality activities of Services Labeling and Applicable Products/Services The SMM Group’s core businesses are mineral resources, each business division throughout the company. The smelting and refining, and materials. In addition to ore committee is responsible for reviewing company-wide Most items in the SMM Group product lineup are supplied Information requiring Applicable refining and the manufacture and sale of metal ingots for activities and deliberating on changes to the as raw or processed materials for use by customers in the disclosure products/services use as a raw material, we manufacture and sell products company-wide quality policy. The Safety & Environment manufacture of their products. Information customers require in order to handle our products properly from All products/services containing such as semiconductor materials and advanced Control Department (from July 2014, the newly substances requiring manage- safety and environmental perspectives, as well as materials, drawing out the potential of each metal through established Quality Assurance Department) is in charge The sourcing of components ment under legislation while no our own processes. The customers of our raw materials of communicating and administering matters relating to information enabling them to supply the final product, is of the product or service such information requirement is generally communicated in product specifications at the addressed to our main products and processed materials businesses may differ, but we the company-wide quality policy. It also provides support, (raw materials and internally- strive to fulfill the needs of each and every one, by in the form of guidance, assistance, information and time of contract, during technical discussions, and via processed materials). introducing world-class, cutting-edge technologies to education, to the personnel in charge of quality control in inspection certificates2 and SDS, based on a database of Content, particularly with information ranging from the past to the most recently All products/services containing ensure high levels of performance and quality. The whole each business. regard to substances that substances requiring manage- 1. Around 80% of business sites in Japan have acquired ISO 9001 certification. acquired knowledge, and necessary surveys. might produce an environmen- SMM Group pursues superior product creation, ment under legislation All locations which have not been certified operate their own quality tal or social impact incorporating quality, safety and environmental management systems. SMM products supplied as final products to customers considerations, through compliance with product safety are carefully designed, incorporating considerations All products/services containing toward safety and environmental compatibility, and are Safe use of the product or and other product-related laws and regulations. This is substances requiring manage- Employee Growth through “Quality Training” service something that only we can do as a company carrying out only delivered after thorough trials and inspections carried ment under legislation manufacturing from the raw materials stage. To maintain consistent customer satisfaction in quality, it is out during their manufacture. necessary to nurture employees who can respond to ever All products/services containing We make sure that information utilized for the above is Disposal of the product and substances requiring manage- changing demands and circumstances. To that end, we always appropriate through operation of a management environmental/social impacts ment under legislation Company-wide Pursue quality levels have begun systematic quality training for administrators system, reviewing the information based upon the latest Quality Policy 1 that stand out from and manufacturing sites. Moreover, we are conducting technology, recent laws and regulations, and requests the trends of the time skill improvement programs for internal quality auditors to Provide quality to satisfy from customers. ensure the integrity of all processes and implementation of 2. Inspection certificate: Product composition and performance documentation our customers through Abide by laws and rules issued for each batch Communication with Customers continual improvements and strive to create continual improvements. As mentioned earlier, most SMM Group products are raw of quality assurance and 2 products incorporating Important Information on Products and Services or processed materials and they have a major influence control systems. safety and environmen- Raising the Standard of “Total Quality” tal considerations  Does the product or service contain or involve materials on the performance and quality of the products At SMM, we accurately determine the effects of that are potentially harmful, particularly to the manufactured by customers. It is therefore vital that we products and services on health and safety so that we can engage in apt and adequate communication with Quality Management Frameworks environment or society? seek improvements through organized implementation  What information is available regarding how to use the customers all the way from the order through to At SMM, based on the company-wide quality policy, and linking of management systems covering the product or service safely? manufacturing, delivery and follow-up confirmation that environment (considerations toward and improvements to personnel with responsibility over each business site set  Will recycling or disposal of the product harm the our products performed according to specifications after policies and plans tailored to their particular local and global environments), occupational safety environment or society? passing into the hands of customers. We also implement circumstances and issues and put in place management (safety of business processes) and quality (satisfaction We also conduct surveys linked to life cycle other initiatives required for some products, including systems centered on the ISO 9001 standard1. from product use). For that purpose, we work to raise the assessments (LCA) for copper, nickel and zinc through routine questionnaires, and use information such as Furthermore, we pursue effective activities through proper level of “total quality” through current assessments, the associations related to individual products. complaint trends and customer feedback to evaluate the system operation, and those activities are audited under setting of improvement targets, the execution of satisfaction of individual customers on a five-tiered scale. an internal quality audit system. improvements and verification for each process. Almost The findings are incorporated into action and measures at Methods for Providing Information all our products are subjected to this kind of “Assessment the management level through the management systems to Improvement” cycle. Provision of Information Relating to Specifications in place. ■ Cycle for Instilling Our Products with “Total Quality” Information regarding product specifications requested by the customer on their order placement sheet is provided Issues and Targets: Creating Quality through Assessment (of current situation) by showing specifications of the product delivered by SMM on the order received sheet. Employee Involvement “Total quality” improvement for After re-acknowledging that quality is all about striving to the entire product life cycle Design/Development Storage/Distribution/Supply Provision of Information Relating to Chemicals fulfill the requirements of the customer, with everyone Carry out design, verification and Include health and safety aspects Customers have a major interest in companies’ response involved making an effort to find out what those improvement to match the required of each stage of distribution in to regulations on health and safety relating to product requirements really are, information sharing activities were quality, factoring in manufacturing “total quality” and perform and post-use verification and improvement handling and chemical substance regulations. The SMM commenced in FY2011. These activities require dynamic Group provides information on chemical substances efforts based on timely and accurate communication. Verification contained in products using SDS and other methods. Ongoing improvements are being made to management Product concept development Authentication Use/Customer service systems to be utilized for the activities. In terms of product Create a product concept Make sure to perform the Perform maintenance, referring to Other Methods safety and information disclosure, we will bolster based on “total quality” necessary customer authentication, considerations during product including in relation to legal concept development The SMM Group also engages in transactions such as frameworks for disclosing all the information customers compliance and public benefit sales of different types of lubricants, where the customers require, including information on substances in our are general consumers. In line with related laws and products, and further ensure frameworks allowing a swift regulations, we provide information on products and and appropriate response to customer needs. As for Marketing Procurement/Production Disposal, reuse or recycling services in this area through labeling, advertisements and raising the level of customer satisfaction, first we will Work with the customer to Keep processes in controlled Perform maintenance, referring to Improvement plan (target-setting) explanations to ensure correct understanding among improve methods of measuring and evaluating customer achieve “total quality” conditions at all times and make considerations during R&D improvements consumers. satisfaction and then work to increase customer There were no violations of laws or regulations relating to satisfaction through effective measures after accurately products and services during FY2013. identifying the issues at hand. Improvement

65 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 66 Stakeholder Communication Relations with Customers

The Quality Management Committee works to promote ■ Information on SMM Products Requiring Disclosure by Basic Approach Disclosure of Information on Products and and support the implementation of quality activities of Services Labeling and Applicable Products/Services The SMM Group’s core businesses are mineral resources, each business division throughout the company. The smelting and refining, and materials. In addition to ore committee is responsible for reviewing company-wide Most items in the SMM Group product lineup are supplied Information requiring Applicable refining and the manufacture and sale of metal ingots for activities and deliberating on changes to the as raw or processed materials for use by customers in the disclosure products/services use as a raw material, we manufacture and sell products company-wide quality policy. The Safety & Environment manufacture of their products. Information customers require in order to handle our products properly from All products/services containing such as semiconductor materials and advanced Control Department (from July 2014, the newly substances requiring manage- safety and environmental perspectives, as well as materials, drawing out the potential of each metal through established Quality Assurance Department) is in charge The sourcing of components ment under legislation while no our own processes. The customers of our raw materials of communicating and administering matters relating to information enabling them to supply the final product, is of the product or service such information requirement is generally communicated in product specifications at the addressed to our main products and processed materials businesses may differ, but we the company-wide quality policy. It also provides support, (raw materials and internally- strive to fulfill the needs of each and every one, by in the form of guidance, assistance, information and time of contract, during technical discussions, and via processed materials). introducing world-class, cutting-edge technologies to education, to the personnel in charge of quality control in inspection certificates2 and SDS, based on a database of Content, particularly with information ranging from the past to the most recently All products/services containing ensure high levels of performance and quality. The whole each business. regard to substances that substances requiring manage- 1. Around 80% of business sites in Japan have acquired ISO 9001 certification. acquired knowledge, and necessary surveys. might produce an environmen- SMM Group pursues superior product creation, ment under legislation All locations which have not been certified operate their own quality tal or social impact incorporating quality, safety and environmental management systems. SMM products supplied as final products to customers considerations, through compliance with product safety are carefully designed, incorporating considerations All products/services containing toward safety and environmental compatibility, and are Safe use of the product or and other product-related laws and regulations. This is substances requiring manage- Employee Growth through “Quality Training” service something that only we can do as a company carrying out only delivered after thorough trials and inspections carried ment under legislation manufacturing from the raw materials stage. To maintain consistent customer satisfaction in quality, it is out during their manufacture. necessary to nurture employees who can respond to ever All products/services containing We make sure that information utilized for the above is Disposal of the product and substances requiring manage- changing demands and circumstances. To that end, we always appropriate through operation of a management environmental/social impacts ment under legislation Company-wide Pursue quality levels have begun systematic quality training for administrators system, reviewing the information based upon the latest Quality Policy 1 that stand out from and manufacturing sites. Moreover, we are conducting technology, recent laws and regulations, and requests the trends of the time skill improvement programs for internal quality auditors to Provide quality to satisfy from customers. ensure the integrity of all processes and implementation of 2. Inspection certificate: Product composition and performance documentation our customers through Abide by laws and rules issued for each batch Communication with Customers continual improvements and strive to create continual improvements. As mentioned earlier, most SMM Group products are raw of quality assurance and 2 products incorporating Important Information on Products and Services or processed materials and they have a major influence control systems. safety and environmen- Raising the Standard of “Total Quality” tal considerations  Does the product or service contain or involve materials on the performance and quality of the products At SMM, we accurately determine the effects of that are potentially harmful, particularly to the manufactured by customers. It is therefore vital that we products and services on health and safety so that we can engage in apt and adequate communication with Quality Management Frameworks environment or society? seek improvements through organized implementation  What information is available regarding how to use the customers all the way from the order through to At SMM, based on the company-wide quality policy, and linking of management systems covering the product or service safely? manufacturing, delivery and follow-up confirmation that environment (considerations toward and improvements to personnel with responsibility over each business site set  Will recycling or disposal of the product harm the our products performed according to specifications after policies and plans tailored to their particular local and global environments), occupational safety environment or society? passing into the hands of customers. We also implement circumstances and issues and put in place management (safety of business processes) and quality (satisfaction We also conduct surveys linked to life cycle other initiatives required for some products, including systems centered on the ISO 9001 standard1. from product use). For that purpose, we work to raise the assessments (LCA) for copper, nickel and zinc through routine questionnaires, and use information such as Furthermore, we pursue effective activities through proper level of “total quality” through current assessments, the associations related to individual products. complaint trends and customer feedback to evaluate the system operation, and those activities are audited under setting of improvement targets, the execution of satisfaction of individual customers on a five-tiered scale. an internal quality audit system. improvements and verification for each process. Almost The findings are incorporated into action and measures at Methods for Providing Information all our products are subjected to this kind of “Assessment the management level through the management systems to Improvement” cycle. Provision of Information Relating to Specifications in place. ■ Cycle for Instilling Our Products with “Total Quality” Information regarding product specifications requested by the customer on their order placement sheet is provided Issues and Targets: Creating Quality through Assessment (of current situation) by showing specifications of the product delivered by SMM on the order received sheet. Employee Involvement “Total quality” improvement for After re-acknowledging that quality is all about striving to the entire product life cycle Design/Development Storage/Distribution/Supply Provision of Information Relating to Chemicals fulfill the requirements of the customer, with everyone Carry out design, verification and Include health and safety aspects Customers have a major interest in companies’ response involved making an effort to find out what those improvement to match the required of each stage of distribution in to regulations on health and safety relating to product requirements really are, information sharing activities were quality, factoring in manufacturing “total quality” and perform and post-use verification and improvement handling and chemical substance regulations. The SMM commenced in FY2011. These activities require dynamic Group provides information on chemical substances efforts based on timely and accurate communication. Verification contained in products using SDS and other methods. Ongoing improvements are being made to management Product concept development Authentication Use/Customer service systems to be utilized for the activities. In terms of product Create a product concept Make sure to perform the Perform maintenance, referring to Other Methods safety and information disclosure, we will bolster based on “total quality” necessary customer authentication, considerations during product including in relation to legal concept development The SMM Group also engages in transactions such as frameworks for disclosing all the information customers compliance and public benefit sales of different types of lubricants, where the customers require, including information on substances in our are general consumers. In line with related laws and products, and further ensure frameworks allowing a swift regulations, we provide information on products and and appropriate response to customer needs. As for Marketing Procurement/Production Disposal, reuse or recycling services in this area through labeling, advertisements and raising the level of customer satisfaction, first we will Work with the customer to Keep processes in controlled Perform maintenance, referring to Improvement plan (target-setting) explanations to ensure correct understanding among improve methods of measuring and evaluating customer achieve “total quality” conditions at all times and make considerations during R&D improvements consumers. satisfaction and then work to increase customer There were no violations of laws or regulations relating to satisfaction through effective measures after accurately products and services during FY2013. identifying the issues at hand. Improvement

65 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 66 Stakeholder Communication Relations with Suppliers

In order to extend these kinds of activities to other exchanges to report to the Securities and Exchange Basic Approach divisions, we began deliberation in the CSR Committee’s Commission (SEC) on their use of “conflict minerals” Examples of Plant operations are sustained by a large number of Human Rights & Human Resources Development (gold, tin, tantalum and tungsten) produced in the Communication with suppliers1, including suppliers of various ores and Subcommittee on human rights due diligence within the Democratic Republic of Congo or any of nine surrounding intermediate materials; suppliers of ancillary materials, supply chain from the second half of FY2013. countries. Other Stakeholders fuel and other materials used for operations; Given the above circumstances, the SMM Group agrees manufacturers of machinery, equipment and plant Communication with Suppliers with and declares support for the principles of the facilities; and contractors. In the SMM Group, we believe Extractive Industries Transparency Initiative (EITI)2. Based it’s important to build relationships with these suppliers Smooth and regular communication with suppliers is vital on the SMM Group Policy on Human Rights, it is working Examples of Communication with NGOs for gaining an accurate grasp of suppliers’ opinions and based on fairness and mutual trust, enabling mutual to improve transparency among raw materials suppliers to The SMM Group seeks regular communication with requests, and trends within particular industries, as well prosperity over the long term. avoid contributing to human rights violations related to organizations such as NGOs in order to develop mutual as for exchanging information relating to process The SMM Group Code of Conduct calls for group conflict minerals. To give assurance that the SMM Group’s understanding and better relations with stakeholders. improvements and new technologies. Divisions in charge companies to fulfill their collective responsibility toward gold smelting and refining business does not make use of We exchange views with international environmental of procurement engage in this kind of dialogue daily business partners by striving to be “a company conflict minerals that may lead to human rights violations NGO Friends of the Earth Japan (FoE Japan) on a regular, based on friendly relationships the SMM Group has built demonstrating considerable technological capability and or aggravation of conflicts, we began implementing the ongoing basis about the quality of water in rivers up over the years with suppliers. 3 integrity while placing value on trust and with which LBMA Responsible Gold Guidance issued by the London surrounding the plants of Coral Bay Nickel Corporation mutual prosperity can be gained” and stipulates Bullion Market Association (LBMA) in FY2012. The LBMA (CBNC) on Palawan Island and Taganito HPAL Nickel engagement in “free and fair transactions carried out Consideration for Local Communities certified us as being in conformance with the Guidance in Corporation (THPAL) on Mindanao Island in the under conditions of propriety” as the Group’s stance on Procurement is one aspect of the SMM Group’s business September 2013 following a third-party audit. Philippines. purchasing activities. operations which benefits local economies. We undertake By minimizing the impact of refinery construction and procurement in local communities according to the operation on the surrounding environment, with the 1. At SMM, raw materials procurement is performed by individual business understanding and support of local residents, CBNC and divisions while procurement of equipment and materials for operations company’s purchasing classifications. (including ancillary materials) is performed by the Purchasing Department. The Niihama District, as our main business center, has THPAL are working to coexist with the natural environment. always supported our business and we have developed CBNC has also commenced rehabilitation efforts that will turn its Tailings Storage Facility No.1, a tailings dam no Supplier Selection in tandem with the community. We contribute to local development through procurement wherever the Group longer in use, back into a natural state covered in Suppliers are selected in line with our regulations on operates. vegetation. materials. The following criteria are taken into account. The proportion of payments made to local suppliers in  Certificate from the LBMA SMM explains these local activities to FoE Japan in FY2013 was 52% (¥13.5 billion) for the Niihama District. detail and will continue to advance necessary improvements while listening to opinions and arguments 1. Credit rating 2. The Extractive Industries Transparency Initiative: put forward by FoE Japan. 2. Level of technology Establishing a System for Supply Chain A global cooperative framework that aims to prevent corruption and conflict— Management thereby promoting responsible resource development that leads to growth 3. Condition and capacity of equipment and the reduction of poverty—through greater transparency in payments 4. Delivery date certainty and flexibility in abnormal The Materials Division views maintenance and operation made to governments by extractive industries such as oil, gas and mineral circumstances resources. of a system for supply chain management as its corporate 3 LBMA Responsible Gold Guidance: 5. Willingness to cooperate with SMM responsibility and an important part of business Guidance issued by the London Bullion Market Association which sets strict administration. standards to prevent widespread organizational violation of human rights, ensure transactions are not used to fund conflicts or terrorism, and prevent Society’s needs change with the times, and suppliers’ money laundering. When engaging in business for the first time, a materials technical expertise and facilities may not always fit the transaction notice is sent to the supplier, who submits a division’s requirements. And, needless to say, industry letter of intent after confirming SMM’s policy and trends and the opinions of suppliers must be taken into approach. account when we engage in transactions. Issues and Targets The Purchasing Department is in contact with around The Materials Division maintains ties with suppliers As mentioned above, the Human Rights & Human 4,000 suppliers. Basic transaction agreements are through ongoing, two-way communication. Resources Development Subcommittee within the CSR entered into with suppliers with whom transactions of a Committee started deliberating on implementation of certain size are expected on an ongoing basis (381 Initiatives Relating to Conflict Minerals company-wide activities in line with the SMM Group Policy companies as of March 2014). on Human Rights in October 2013, and a working group Suppliers who enter a basic transaction agreement are The Democratic Republic of the Congo and surrounding was set up comprising business divisions, which are asked to respond to a supplier survey once every three countries produce large amounts of minerals such as responsible for procuring raw materials, and the years. gold, tin and tantalum. Excavation of these mineral Purchasing Department. Advice is also sought from a Although agreements and supplier surveys do not touch resources can lead to severe human rights abuses such third-party organization as a way to incorporate an upon human rights, SMM does recognize observance of as forced labor and child labor, and rebel forces and objective outlook. human rights by suppliers as an important criterion. The other armed groups use these resources as a major Through these efforts, we aim to build up a framework Purchasing Department conducted a human rights source of funds, thereby expanding and prolonging for human rights management within the supply chain, questionnaire in line with the SMM Group Policy on conflicts. enabling all divisions with procurement functions to Human Rights established in August 2010, targeting 15 Besides requesting nations to ban arms exports to engage in activities urging suppliers to show respect for suppliers of parts and ancillary materials contained in countries involved in conflicts, the international community human rights and prevent human rights violations. SMM products that could potentially impact the supply is trying to stem conflict with ever stricter demands, such chain (SMM, customers and consumers). On-site as asking the mineral resources industry to boycott hearings based on responses to the questionnaire were minerals sold by armed groups. then conducted. The surveys of the 15 suppliers were Laws and other regulations are also being put in place. completed by March 31, 2013. We confirmed there were In the United States, the Dodd-Frank Wall Street Reform no problems with any of the suppliers’ efforts to observe and Consumer Protection Act became law in July 2010. human rights. The act obligates corporations listed on American stock

67 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 68 Stakeholder Communication Relations with Suppliers

In order to extend these kinds of activities to other exchanges to report to the Securities and Exchange Basic Approach divisions, we began deliberation in the CSR Committee’s Commission (SEC) on their use of “conflict minerals” Examples of Plant operations are sustained by a large number of Human Rights & Human Resources Development (gold, tin, tantalum and tungsten) produced in the Communication with suppliers1, including suppliers of various ores and Subcommittee on human rights due diligence within the Democratic Republic of Congo or any of nine surrounding intermediate materials; suppliers of ancillary materials, supply chain from the second half of FY2013. countries. Other Stakeholders fuel and other materials used for operations; Given the above circumstances, the SMM Group agrees manufacturers of machinery, equipment and plant Communication with Suppliers with and declares support for the principles of the facilities; and contractors. In the SMM Group, we believe Extractive Industries Transparency Initiative (EITI)2. Based it’s important to build relationships with these suppliers Smooth and regular communication with suppliers is vital on the SMM Group Policy on Human Rights, it is working Examples of Communication with NGOs for gaining an accurate grasp of suppliers’ opinions and based on fairness and mutual trust, enabling mutual to improve transparency among raw materials suppliers to The SMM Group seeks regular communication with requests, and trends within particular industries, as well prosperity over the long term. avoid contributing to human rights violations related to organizations such as NGOs in order to develop mutual as for exchanging information relating to process The SMM Group Code of Conduct calls for group conflict minerals. To give assurance that the SMM Group’s understanding and better relations with stakeholders. improvements and new technologies. Divisions in charge companies to fulfill their collective responsibility toward gold smelting and refining business does not make use of We exchange views with international environmental of procurement engage in this kind of dialogue daily business partners by striving to be “a company conflict minerals that may lead to human rights violations NGO Friends of the Earth Japan (FoE Japan) on a regular, based on friendly relationships the SMM Group has built demonstrating considerable technological capability and or aggravation of conflicts, we began implementing the ongoing basis about the quality of water in rivers up over the years with suppliers. 3 integrity while placing value on trust and with which LBMA Responsible Gold Guidance issued by the London surrounding the plants of Coral Bay Nickel Corporation mutual prosperity can be gained” and stipulates Bullion Market Association (LBMA) in FY2012. The LBMA (CBNC) on Palawan Island and Taganito HPAL Nickel engagement in “free and fair transactions carried out Consideration for Local Communities certified us as being in conformance with the Guidance in Corporation (THPAL) on Mindanao Island in the under conditions of propriety” as the Group’s stance on Procurement is one aspect of the SMM Group’s business September 2013 following a third-party audit. Philippines. purchasing activities. operations which benefits local economies. We undertake By minimizing the impact of refinery construction and procurement in local communities according to the operation on the surrounding environment, with the 1. At SMM, raw materials procurement is performed by individual business understanding and support of local residents, CBNC and divisions while procurement of equipment and materials for operations company’s purchasing classifications. (including ancillary materials) is performed by the Purchasing Department. The Niihama District, as our main business center, has THPAL are working to coexist with the natural environment. always supported our business and we have developed CBNC has also commenced rehabilitation efforts that will turn its Tailings Storage Facility No.1, a tailings dam no Supplier Selection in tandem with the community. We contribute to local development through procurement wherever the Group longer in use, back into a natural state covered in Suppliers are selected in line with our regulations on operates. vegetation. materials. The following criteria are taken into account. The proportion of payments made to local suppliers in  Certificate from the LBMA SMM explains these local activities to FoE Japan in FY2013 was 52% (¥13.5 billion) for the Niihama District. detail and will continue to advance necessary improvements while listening to opinions and arguments 1. Credit rating 2. The Extractive Industries Transparency Initiative: put forward by FoE Japan. 2. Level of technology Establishing a System for Supply Chain A global cooperative framework that aims to prevent corruption and conflict— Management thereby promoting responsible resource development that leads to growth 3. Condition and capacity of equipment and the reduction of poverty—through greater transparency in payments 4. Delivery date certainty and flexibility in abnormal The Materials Division views maintenance and operation made to governments by extractive industries such as oil, gas and mineral circumstances resources. of a system for supply chain management as its corporate 3 LBMA Responsible Gold Guidance: 5. Willingness to cooperate with SMM responsibility and an important part of business Guidance issued by the London Bullion Market Association which sets strict administration. standards to prevent widespread organizational violation of human rights, ensure transactions are not used to fund conflicts or terrorism, and prevent Society’s needs change with the times, and suppliers’ money laundering. When engaging in business for the first time, a materials technical expertise and facilities may not always fit the transaction notice is sent to the supplier, who submits a division’s requirements. And, needless to say, industry letter of intent after confirming SMM’s policy and trends and the opinions of suppliers must be taken into approach. account when we engage in transactions. Issues and Targets The Purchasing Department is in contact with around The Materials Division maintains ties with suppliers As mentioned above, the Human Rights & Human 4,000 suppliers. Basic transaction agreements are through ongoing, two-way communication. Resources Development Subcommittee within the CSR entered into with suppliers with whom transactions of a Committee started deliberating on implementation of certain size are expected on an ongoing basis (381 Initiatives Relating to Conflict Minerals company-wide activities in line with the SMM Group Policy companies as of March 2014). on Human Rights in October 2013, and a working group Suppliers who enter a basic transaction agreement are The Democratic Republic of the Congo and surrounding was set up comprising business divisions, which are asked to respond to a supplier survey once every three countries produce large amounts of minerals such as responsible for procuring raw materials, and the years. gold, tin and tantalum. Excavation of these mineral Purchasing Department. Advice is also sought from a Although agreements and supplier surveys do not touch resources can lead to severe human rights abuses such third-party organization as a way to incorporate an upon human rights, SMM does recognize observance of as forced labor and child labor, and rebel forces and objective outlook. human rights by suppliers as an important criterion. The other armed groups use these resources as a major Through these efforts, we aim to build up a framework Purchasing Department conducted a human rights source of funds, thereby expanding and prolonging for human rights management within the supply chain, questionnaire in line with the SMM Group Policy on conflicts. enabling all divisions with procurement functions to Human Rights established in August 2010, targeting 15 Besides requesting nations to ban arms exports to engage in activities urging suppliers to show respect for suppliers of parts and ancillary materials contained in countries involved in conflicts, the international community human rights and prevent human rights violations. SMM products that could potentially impact the supply is trying to stem conflict with ever stricter demands, such chain (SMM, customers and consumers). On-site as asking the mineral resources industry to boycott hearings based on responses to the questionnaire were minerals sold by armed groups. then conducted. The surveys of the 15 suppliers were Laws and other regulations are also being put in place. completed by March 31, 2013. We confirmed there were In the United States, the Dodd-Frank Wall Street Reform no problems with any of the suppliers’ efforts to observe and Consumer Protection Act became law in July 2010. human rights. The act obligates corporations listed on American stock

67 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 68 Stakeholder Initiatives in the Six Key CSR Areas Communication Stakeholder Communication

Communication with Local Communities Communication with Employees Communication with Customers

The SMM Group seeks adequate communication with people in the local community when making inroads into a new The SMM Group gains insight into the opinions of We work to raise the level of customer satisfaction by region. We also build up relationships of trust with the local community through regular communication even after employees in a variety of ways, such as through maintaining close communication with customers. operations commence. workers’ unions and awareness surveys, and applies it to management to ensure that employees remain Listening and Communication with Customers; Key proud of where they work and what they do. The Suigun Boat Races success Factors in SHAP Marketing

Lunch with the President SHAP Marketing handles all overseas lead frame sales that fall outside of Japan and we manage many strategic key customers’ accounts. The art of being a good listener and communicator to our customers plays a very important role towards our business success. It is through listening to their feedback, and at times complaints, that we realize our weaknesses in comparison to our competitors. By listening to how our competitors do things better than us, we will then be able to improve ourselves better to match and even surpass our competitors. Being a good communicator will enable us to communicate our strength to our customers, to showcase Lunch with the president our technology so that customers can be convinced that we have a winning formula and be comfortable to engage As part of efforts to improve communication between top and work with us. management and employees, we organize luncheons with As the cycle of the technology evolution is becoming the president to coincide with his visits to business faster and faster, being a good listener and communicator facilities and group companies around the country. During with the customers will ensure that we are aligned with the The Besshi-Niihama District Div. and Shisaka Smelting joint team for the Suigun Boat Races these luncheons, the president engages in face-to-face customers in their focus growth area and therefore be opinion exchange with key personnel at each site. able to stay ahead in this tough lead frame market. The Suigun Boat Races are a community event held every event and who we are reacquainted with each year. I feel The president joins a chosen group of five to six July in Miyakubo, in the city of Imabari, Ehime Prefecture. that mutual trust is developing between us as a result. manager-class employees in a meeting room to have Shisaka Smelting takes part in the races, forming a joint two-way discussions on a theme relevant to the site over a 1. Patrol boat: A boat dispatched to ensure the safe operation of vessels engaged in construction team with the Besshi-Niihama District Division. work. box lunch. It is actually a good opportunity for each of the The event provides an opportunity at the venue to 2. Shisaka Islands: The name for an isolated group of islands approx. 20km off the coast of Niihama (and roughly the same distance from Imabari). The islands consist of Ieno-shima, participants, who usually have no contact with the strengthen social ties with fishermen who man “patrol home to the plant, and Mino-shima, where the former residential area was located, as well as president, to voice what is on their minds, perhaps a little boats”1 during coastal construction work around the Nezumi-shima, Kaji-jima and Myojin-jima. nervously. It has therefore become an occasion for Shisaka Islands, as well as other familiar faces who fish in meaningful opinion exchange. The feedback from the vicinity of the islands. participants has been positive, with one employee saying, Shisaka Smelting is located in the Shisaka Islands2 in “We managed to acquire some insight into the president’s Philip Leong the Seto Inland Sea and employees commute there from ideas, and he even lent an ear to the difficulties we were Marketing Manager, Niihama. This event is a chance for employees to engage having. It was also a good opportunity to have another SH Asia Pacific Pte. Ltd. in communication with people from the community with think about what is required of us in our positions.” whom they usually have little interaction. Because Shisaka By having the president listen to the concerns and Smelting is surrounded by sea, it is essential in a business comments of employees at each site first-hand and continuity context that we maintain relationships of trust Tsuyoshi Okada having him directly convey with local fishermen. Administration Group, Administration Dept. his own thoughts to Even the fishermen, who normally have stern faces Shisaka Smelting Co., Ltd. employees, we want to help when catching fish, contributed to a highly congenial energize the company atmosphere at the venue. They welcomed us with broad through the development of smiles and thanked us for taking part, then at the end sound relationships of trust offered us warm words and told us to come back next between employees and year. the group’s top executive. At reception and after the opening ceremony while waiting for our turn to race, we had the opportunity to Hideaki Kusanagi communicate with the fishermen who were running the Manager, Secretarial Dept.

My Way of My Way of Doing Good While running in the hills, I find it incredibly uplifting when I meet people along the way and we naturally greet Doing Good I am an active member of a local fire defense brigade in Mitaka, Tokyo. The reason I joined was because people one another, and move aside to let the other pass. Greetings are very important as they not only help us open in the community we came to know through child-raising had been kind to my family, even though we didn’t up, but they help others open up, too. Greetings are said to be one of the basics for leading a vibrant, full life. I have any community ties when we transferred here. As gratitude for the kindness, I was looking for a way to get would like to build a safe, abundant society where we acknowledge one another’s existence with greetings of involved in the community. The brigade happened to be aging and dwindling in size. Taking part in monthly fire genuine feeling that come to us naturally. hose drills and snow shoveling after the big snowfall this year, I am interacting more with the community. Hiroaki Tsunoda SH Materials Co., Ltd. Kouhei Ikemachi Internal Audit Dept.

69 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 70 Stakeholder Initiatives in the Six Key CSR Areas Communication Stakeholder Communication

Communication with Local Communities Communication with Employees Communication with Customers

The SMM Group seeks adequate communication with people in the local community when making inroads into a new The SMM Group gains insight into the opinions of We work to raise the level of customer satisfaction by region. We also build up relationships of trust with the local community through regular communication even after employees in a variety of ways, such as through maintaining close communication with customers. operations commence. workers’ unions and awareness surveys, and applies it to management to ensure that employees remain Listening and Communication with Customers; Key proud of where they work and what they do. The Suigun Boat Races success Factors in SHAP Marketing

Lunch with the President SHAP Marketing handles all overseas lead frame sales that fall outside of Japan and we manage many strategic key customers’ accounts. The art of being a good listener and communicator to our customers plays a very important role towards our business success. It is through listening to their feedback, and at times complaints, that we realize our weaknesses in comparison to our competitors. By listening to how our competitors do things better than us, we will then be able to improve ourselves better to match and even surpass our competitors. Being a good communicator will enable us to communicate our strength to our customers, to showcase Lunch with the president our technology so that customers can be convinced that we have a winning formula and be comfortable to engage As part of efforts to improve communication between top and work with us. management and employees, we organize luncheons with As the cycle of the technology evolution is becoming the president to coincide with his visits to business faster and faster, being a good listener and communicator facilities and group companies around the country. During with the customers will ensure that we are aligned with the The Besshi-Niihama District Div. and Shisaka Smelting joint team for the Suigun Boat Races these luncheons, the president engages in face-to-face customers in their focus growth area and therefore be opinion exchange with key personnel at each site. able to stay ahead in this tough lead frame market. The Suigun Boat Races are a community event held every event and who we are reacquainted with each year. I feel The president joins a chosen group of five to six July in Miyakubo, in the city of Imabari, Ehime Prefecture. that mutual trust is developing between us as a result. manager-class employees in a meeting room to have Shisaka Smelting takes part in the races, forming a joint two-way discussions on a theme relevant to the site over a 1. Patrol boat: A boat dispatched to ensure the safe operation of vessels engaged in construction team with the Besshi-Niihama District Division. work. box lunch. It is actually a good opportunity for each of the The event provides an opportunity at the venue to 2. Shisaka Islands: The name for an isolated group of islands approx. 20km off the coast of Niihama (and roughly the same distance from Imabari). The islands consist of Ieno-shima, participants, who usually have no contact with the strengthen social ties with fishermen who man “patrol home to the plant, and Mino-shima, where the former residential area was located, as well as president, to voice what is on their minds, perhaps a little boats”1 during coastal construction work around the Nezumi-shima, Kaji-jima and Myojin-jima. nervously. It has therefore become an occasion for Shisaka Islands, as well as other familiar faces who fish in meaningful opinion exchange. The feedback from the vicinity of the islands. participants has been positive, with one employee saying, Shisaka Smelting is located in the Shisaka Islands2 in “We managed to acquire some insight into the president’s Philip Leong the Seto Inland Sea and employees commute there from ideas, and he even lent an ear to the difficulties we were Marketing Manager, Niihama. This event is a chance for employees to engage having. It was also a good opportunity to have another SH Asia Pacific Pte. Ltd. in communication with people from the community with think about what is required of us in our positions.” whom they usually have little interaction. Because Shisaka By having the president listen to the concerns and Smelting is surrounded by sea, it is essential in a business comments of employees at each site first-hand and continuity context that we maintain relationships of trust Tsuyoshi Okada having him directly convey with local fishermen. Administration Group, Administration Dept. his own thoughts to Even the fishermen, who normally have stern faces Shisaka Smelting Co., Ltd. employees, we want to help when catching fish, contributed to a highly congenial energize the company atmosphere at the venue. They welcomed us with broad through the development of smiles and thanked us for taking part, then at the end sound relationships of trust offered us warm words and told us to come back next between employees and year. the group’s top executive. At reception and after the opening ceremony while waiting for our turn to race, we had the opportunity to Hideaki Kusanagi communicate with the fishermen who were running the Manager, Secretarial Dept.

My Way of My Way of Doing Good While running in the hills, I find it incredibly uplifting when I meet people along the way and we naturally greet Doing Good I am an active member of a local fire defense brigade in Mitaka, Tokyo. The reason I joined was because people one another, and move aside to let the other pass. Greetings are very important as they not only help us open in the community we came to know through child-raising had been kind to my family, even though we didn’t up, but they help others open up, too. Greetings are said to be one of the basics for leading a vibrant, full life. I have any community ties when we transferred here. As gratitude for the kindness, I was looking for a way to get would like to build a safe, abundant society where we acknowledge one another’s existence with greetings of involved in the community. The brigade happened to be aging and dwindling in size. Taking part in monthly fire genuine feeling that come to us naturally. hose drills and snow shoveling after the big snowfall this year, I am interacting more with the community. Hiroaki Tsunoda SH Materials Co., Ltd. Kouhei Ikemachi Internal Audit Dept.

69 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 70 Economic Aspects

Strengthening Economic Ties with Stakeholders

■ To shareholders and creditors, SMM paid a total of Overview of FY2013 Financial Results Consolidated Net Sales (Billion yen) Aiming to be a World Leader in the ¥31.1 billion in dividends and interest on debt. 1,000 The global economy maintained positive growth during Non-ferrous Metals Industry and an To the government, we paid ¥25.5 billion in taxes. FY2013 due to the steady performance of the U.S. Excellent Company of Japan 864.1 847.9 To society, we contributed ¥0.6 billion, including 830.5 economy, the bottoming out of the European economy, 808.5 SMM began as a company in the copper smelting donations for social contribution activities. 800 and the stabilization of economic growth in emerging 725.8 business, and beyond just securing interests in superior Financial assistance from the government totaled ¥0.1 countries, especially in China. The Japanese economy resources, we believe that we can contribute to society billion and included cash subsidies and grants. showed steady improvement, buoyed by robust by providing high quality base metal and materials, 600 consumer spending and by a recovery in the export which raises our corporate value. This is the real Projected Benefit Obligation SMM has the following defined-benefit systems in place, environment resulting from a weaker yen. meaning of being a “World Leader in the Non-ferrous principally in Japan: a lump-sum retirement payment In the non-ferrous metals industry, nickel and copper Metals Industry,” which is the objective of our continuing 400 plan; a defined-benefit corporate pension plan (in some prices continued on a downward trend, before growth. In order to become an “Excellent Company of cases, a qualified retirement pension plan); and an bottoming out briefly in part due to an easing of Japan,” we are aiming at the outworking of our growth employees’ pension fund. The projected benefit wariness over the future of the economy. Subsequently, 200 strategy under a stable management foundation with obligation is ¥57.9 billion. The portion of the projected nickel prices rose toward the end of the fiscal year out of earning power at a scale of ¥1,000.0 billion/year in net benefit obligation to be funded by pension assets is supply concerns based on Indonesia’s restrictions on sales, and ¥100.0 billion/year in net income, and ¥56.9 billion. Pension assets available for allocation to the export of ore. Copper prices, however, remained 0 thorough corporate governance and enhanced CSR 2009 2010 2011 2012 2013 (FY) that portion are ¥53.0 billion. bearish. As for gold prices, some bullish signs have activities based on a solid corporate philosophy and been seen since the end of 2013, although anticipation management vision. * Amounts are rounded to one decimal place. for further downside movement continued due to an ■ Consolidated Recurring Profit Detailed financial information can be viewed in the “IR Information” section of (Billion yen) the SMM website. outflow of investment funds as a consequence of 140 Distribution of Value to Stakeholders http://www.smm.co.jp/E/ir/ recovery of the U.S. economy. 123.7 115.0 Economic value was distributed to stakeholders during In industries related to the materials business, the 120 114.4 FY2013 as follows: demand for automobile battery components increased, 108.8 Payments made to suppliers to purchase merchandise and a strong sales environment was maintained for 100 necessary for business, for example, were ¥717.3 billion. components for high performance mobile devices and 87.8 Employee salaries and welfare expenses were ¥35.2 for home appliances. 80 billion. Under these circumstances, despite a decline in copper sales, consolidated net sales in FY2013 grew by 60 ¥22.006 billion from FY2012 to ¥830.546 billion, mainly ■ Distribution of Economic Value to Stakeholders due to an increase in revenue caused by a weaker yen 40 and an increase in the volume of electrolytic nickel Distributed Economic Value sales. 20 Stakeholder Amount Details Consolidated operating income was ¥75.418 billion, a decrease of ¥20.367 billion from FY2012. This was due Suppliers ¥717.3 billion Payments for purchase of merchandise, etc. 0 to such factors as declines in gold and nickel prices, 2009 2010 2011 2012 2013 (FY) Employees ¥35.2 billion Payments to employees and despite the positive effect of a weaker yen. Consolidated recurring profit decreased ¥0.682 billion Shareholders/Creditors ¥31.1 billion Payments of dividends/interest ■ Consolidated Net Income from FY2012 to ¥114.352 billion, owing to such factors (Billion yen) Government ¥25.5 billion Taxes paid as increased equity in earnings of affiliated companies, 100 86.6 despite a decrease in consolidated operating income. 90 Society ¥0.6 billion Donations, etc. 84.0 Consolidated net income decreased ¥6.382 billion from 80.3 * A retained value of ¥59.0 billion is not included in the above. Rent for use of land is minimal and therefore included in “Payments for purchase of merchandise, etc.” FY2012 to ¥80.258 billion, owing to such factors as an 80 increase in the provision for environmental measures. 70 65.3 Consolidated total capital was ¥1,572.4 billion, Financial Assistance from the Government 60 composed of ¥553.3 billion in liabilities and ¥1,019.1 54.0 Stakeholder Amount Details billion in net assets. 50

40 Government ¥0.1 billion Subsidies, grants, etc.

30 * No governments have an equity stake in SMM

20

10

0 2009 2010 2011 2012 2013 (FY)

71 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 72 Economic Aspects

Strengthening Economic Ties with Stakeholders

■ To shareholders and creditors, SMM paid a total of Overview of FY2013 Financial Results Consolidated Net Sales (Billion yen) Aiming to be a World Leader in the ¥31.1 billion in dividends and interest on debt. 1,000 The global economy maintained positive growth during Non-ferrous Metals Industry and an To the government, we paid ¥25.5 billion in taxes. FY2013 due to the steady performance of the U.S. Excellent Company of Japan 864.1 847.9 To society, we contributed ¥0.6 billion, including 830.5 economy, the bottoming out of the European economy, 808.5 SMM began as a company in the copper smelting donations for social contribution activities. 800 and the stabilization of economic growth in emerging 725.8 business, and beyond just securing interests in superior Financial assistance from the government totaled ¥0.1 countries, especially in China. The Japanese economy resources, we believe that we can contribute to society billion and included cash subsidies and grants. showed steady improvement, buoyed by robust by providing high quality base metal and materials, 600 consumer spending and by a recovery in the export which raises our corporate value. This is the real Projected Benefit Obligation SMM has the following defined-benefit systems in place, environment resulting from a weaker yen. meaning of being a “World Leader in the Non-ferrous principally in Japan: a lump-sum retirement payment In the non-ferrous metals industry, nickel and copper Metals Industry,” which is the objective of our continuing 400 plan; a defined-benefit corporate pension plan (in some prices continued on a downward trend, before growth. In order to become an “Excellent Company of cases, a qualified retirement pension plan); and an bottoming out briefly in part due to an easing of Japan,” we are aiming at the outworking of our growth employees’ pension fund. The projected benefit wariness over the future of the economy. Subsequently, 200 strategy under a stable management foundation with obligation is ¥57.9 billion. The portion of the projected nickel prices rose toward the end of the fiscal year out of earning power at a scale of ¥1,000.0 billion/year in net benefit obligation to be funded by pension assets is supply concerns based on Indonesia’s restrictions on sales, and ¥100.0 billion/year in net income, and ¥56.9 billion. Pension assets available for allocation to the export of ore. Copper prices, however, remained 0 thorough corporate governance and enhanced CSR 2009 2010 2011 2012 2013 (FY) that portion are ¥53.0 billion. bearish. As for gold prices, some bullish signs have activities based on a solid corporate philosophy and been seen since the end of 2013, although anticipation management vision. * Amounts are rounded to one decimal place. for further downside movement continued due to an ■ Consolidated Recurring Profit Detailed financial information can be viewed in the “IR Information” section of (Billion yen) the SMM website. outflow of investment funds as a consequence of 140 Distribution of Value to Stakeholders http://www.smm.co.jp/E/ir/ recovery of the U.S. economy. 123.7 115.0 Economic value was distributed to stakeholders during In industries related to the materials business, the 120 114.4 FY2013 as follows: demand for automobile battery components increased, 108.8 Payments made to suppliers to purchase merchandise and a strong sales environment was maintained for 100 necessary for business, for example, were ¥717.3 billion. components for high performance mobile devices and 87.8 Employee salaries and welfare expenses were ¥35.2 for home appliances. 80 billion. Under these circumstances, despite a decline in copper sales, consolidated net sales in FY2013 grew by 60 ¥22.006 billion from FY2012 to ¥830.546 billion, mainly ■ Distribution of Economic Value to Stakeholders due to an increase in revenue caused by a weaker yen 40 and an increase in the volume of electrolytic nickel Distributed Economic Value sales. 20 Stakeholder Amount Details Consolidated operating income was ¥75.418 billion, a decrease of ¥20.367 billion from FY2012. This was due Suppliers ¥717.3 billion Payments for purchase of merchandise, etc. 0 to such factors as declines in gold and nickel prices, 2009 2010 2011 2012 2013 (FY) Employees ¥35.2 billion Payments to employees and despite the positive effect of a weaker yen. Consolidated recurring profit decreased ¥0.682 billion Shareholders/Creditors ¥31.1 billion Payments of dividends/interest ■ Consolidated Net Income from FY2012 to ¥114.352 billion, owing to such factors (Billion yen) Government ¥25.5 billion Taxes paid as increased equity in earnings of affiliated companies, 100 86.6 despite a decrease in consolidated operating income. 90 Society ¥0.6 billion Donations, etc. 84.0 Consolidated net income decreased ¥6.382 billion from 80.3 * A retained value of ¥59.0 billion is not included in the above. Rent for use of land is minimal and therefore included in “Payments for purchase of merchandise, etc.” FY2012 to ¥80.258 billion, owing to such factors as an 80 increase in the provision for environmental measures. 70 65.3 Consolidated total capital was ¥1,572.4 billion, Financial Assistance from the Government 60 composed of ¥553.3 billion in liabilities and ¥1,019.1 54.0 Stakeholder Amount Details billion in net assets. 50

40 Government ¥0.1 billion Subsidies, grants, etc.

30 * No governments have an equity stake in SMM

20

10

0 2009 2010 2011 2012 2013 (FY)

71 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 72 Corporate Governance and Management Aspects

Corporate Governance

In establishing and upholding internal controls, we will Basic Approach Corporate Auditors/Board of Corporate Auditors Internal Audit Department work to clarify the roles and duties of SMM Group As of August 2014, SMM had four corporate auditors, The Internal Audit Department was established for the Corporate governance refers to the framework set up to officers, executive officers and employees and ensure two of whom were outside auditors. Corporate auditors purpose of undertaking routine internal audits used to govern corporate activity for the purpose of maximizing that continual improvements are made. attend and express opinions at important meetings, monitor and supervise the execution of business the value of the corporation and ensuring the strength of including meetings of the Board of Directors and the matters. The department carries out internal audits of the the business. SMM views corporate governance as one Management Committee. Corporate auditors from SMM, entire SMM Group. The department supplies information of the most important management themes. Roles of Divisions and Bodies while taking care to remain independent, provide to the corporate auditors on a timely basis, providing, for SMM has adopted corporate auditor and executive Directors/Board of Directors audit-based opinions as full-time auditors. Outside example, explanations of auditing plans. The corporate officer systems, thereby clarifying authority and As of August 2014, SMM has eight directors, including auditors offer independent opinions based on auditors also attend the department’s internal audit responsibilities within executive functions and enabling 1 one outside director. The term of a director is one year. specialized experience and knowledge. briefings for executive officers and other personnel. the Board of Directors to concentrate on supervision and Remuneration for all directors except outside directors is Corporate auditors carry out audits, such as audits of swift decision-making. determined according to a performance-based the execution of duties by directors, according to The company has also set out the SMM Group remuneration system2. Ordinary meetings of the Board 1. Candidates for director, possessing the character and abilities required to auditing plans approved by the Board of Corporate implement the SMM Group Corporate Philosophy and fulfill the group’s social Corporate Philosophy based upon the Sumitomo of Directors are convened once a month and Auditors. responsibility, are nominated by the Board of Directors and approved by a Business Spirit. Furthermore, the SMM Group Code of extraordinary meetings are held as required. This resolution passed at the General Meeting of Shareholders The Board of Corporate Auditors convenes once a 2. Directors (excluding outside directors), executive officers and senior Conduct was formulated as a set of behavioral structure allows for quick and flexible decision-making. month immediately prior to ordinary meetings of the managers are evaluated on various criteria, chiefly quantitative results, safety, guidelines for officers and company employees to follow The Board of Directors discusses and passes business strategy and human resources development Board of Directors and as otherwise required. 3. Six executive officers also serve as directors (as of August 2014) when putting this philosophy into practice. resolutions on important matters relating to the business Through persistent efforts to practice the Corporate execution of the company, including issues relating to ■ Fig. 1 Corporate Governance Framework Philosophy, and sound and efficient corporate activity, conflicts of interest, in line with provisions such as those we will contribute to society and fulfill our responsibilities stipulated in laws and ordinances, articles of toward all our shareholders and other stakeholders. incorporation and regulations pertaining to the Board of General Meeting of Shareholders Directors. Details are disseminated through reporting to Corporate Governance Framework the Executive Officers’ Meeting. SMM’s president chairs Our company’s corporate governance framework is the Board of Directors. shown in Fig. 1. Decision-making and Supervision Auditing Management Committee 1. SMM's organizational structure is divided into three areas: Management Committee meetings are convened by the “Decision-making and Supervision,” performed by the Board of Directors Board of Corporate Independent Public president, executive vice president, senior managing Auditors Accountant Board of Directors; “Business Execution,” with the executive officers and other related executive officers president taking overall responsibility; and “Auditing.” and personnel. SMM’s outside directors and corporate 2. “Execution of Business” and fulfillment of “Social auditors may also attend. Responsibility” (CSR activity/internal controls) are viewed The Management Committee engages in broad-ranging Business Execution together as “Business Execution.” discussion on important matters which require a 3. The Management Committee discusses important matters resolution by the Board of Directors or the final approval President relating to the management of the company. It aims to of the president and which demand particularly careful promote rational business judgment and decision-making deliberation. The Committee decides for or against by deliberating issues in advance of meetings of the Board submission of matters to the Board of Directors and Execution of Business Social Responsibility of Directors, as well as efficient management and provides support on matters falling under the president’s appropriate internal controls. direct authority. Executive Officer Management CSR Committee Internal Controls Enterprise Value 4. The CSR Committee, chaired by the president, comprises Committee Committee Committee the heads of business divisions and corporate staff Executive Officer SMM adopted an executive officer system in June 2001. divisions. The committee was formed with two working Internal Audit Dept. Risk Management Execution of Business Efficient Resource groups and six subcommittees, when existing activities A provision was included in the articles of incorporation (Head Office div.) Working Group Utilization Subcommittee were restructured under the new program of CSR activities in June 2004 to clarify the status of executive officers. 3 Compliance Environmental Preservation on October 1, 2008. Executive officers are entrusted with important Working Group Subcommittee positions such as that of heads of business divisions or 5. The Internal Controls Committee, chaired by the president, 6 CSR Corporate Citizenship advances internal controls in line with the Japanese heads of corporate staff divisions and are conferred Subcommittees Subcommittee inherent authority for business execution. The progress Financial Instruments and Exchange Act of June 2006. In Human Rights & Human Resources compliance with the act, a report on the effectiveness of in execution of business affairs is reported to the Development Subcommittee Executive Officers’ Meeting once a month. Like for internal controls was submitted in June 2014, together with Occupational Health & Safety the company’s securities report for the year ended March directors, remuneration for executive officers is Subcommittee 2014, to the Director-General of the Kanto Local Finance determined according to a performance-based Communication Subcommittee Bureau after first obtaining an internal controls audit report remuneration system. recognizing its appropriateness from an auditing firm.

73 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 74 Corporate Governance and Management Aspects

Corporate Governance

In establishing and upholding internal controls, we will Basic Approach Corporate Auditors/Board of Corporate Auditors Internal Audit Department work to clarify the roles and duties of SMM Group As of August 2014, SMM had four corporate auditors, The Internal Audit Department was established for the Corporate governance refers to the framework set up to officers, executive officers and employees and ensure two of whom were outside auditors. Corporate auditors purpose of undertaking routine internal audits used to govern corporate activity for the purpose of maximizing that continual improvements are made. attend and express opinions at important meetings, monitor and supervise the execution of business the value of the corporation and ensuring the strength of including meetings of the Board of Directors and the matters. The department carries out internal audits of the the business. SMM views corporate governance as one Management Committee. Corporate auditors from SMM, entire SMM Group. The department supplies information of the most important management themes. Roles of Divisions and Bodies while taking care to remain independent, provide to the corporate auditors on a timely basis, providing, for SMM has adopted corporate auditor and executive Directors/Board of Directors audit-based opinions as full-time auditors. Outside example, explanations of auditing plans. The corporate officer systems, thereby clarifying authority and As of August 2014, SMM has eight directors, including auditors offer independent opinions based on auditors also attend the department’s internal audit responsibilities within executive functions and enabling 1 one outside director. The term of a director is one year. specialized experience and knowledge. briefings for executive officers and other personnel. the Board of Directors to concentrate on supervision and Remuneration for all directors except outside directors is Corporate auditors carry out audits, such as audits of swift decision-making. determined according to a performance-based the execution of duties by directors, according to The company has also set out the SMM Group remuneration system2. Ordinary meetings of the Board 1. Candidates for director, possessing the character and abilities required to auditing plans approved by the Board of Corporate implement the SMM Group Corporate Philosophy and fulfill the group’s social Corporate Philosophy based upon the Sumitomo of Directors are convened once a month and Auditors. responsibility, are nominated by the Board of Directors and approved by a Business Spirit. Furthermore, the SMM Group Code of extraordinary meetings are held as required. This resolution passed at the General Meeting of Shareholders The Board of Corporate Auditors convenes once a 2. Directors (excluding outside directors), executive officers and senior Conduct was formulated as a set of behavioral structure allows for quick and flexible decision-making. month immediately prior to ordinary meetings of the managers are evaluated on various criteria, chiefly quantitative results, safety, guidelines for officers and company employees to follow The Board of Directors discusses and passes business strategy and human resources development Board of Directors and as otherwise required. 3. Six executive officers also serve as directors (as of August 2014) when putting this philosophy into practice. resolutions on important matters relating to the business Through persistent efforts to practice the Corporate execution of the company, including issues relating to ■ Fig. 1 Corporate Governance Framework Philosophy, and sound and efficient corporate activity, conflicts of interest, in line with provisions such as those we will contribute to society and fulfill our responsibilities stipulated in laws and ordinances, articles of toward all our shareholders and other stakeholders. incorporation and regulations pertaining to the Board of General Meeting of Shareholders Directors. Details are disseminated through reporting to Corporate Governance Framework the Executive Officers’ Meeting. SMM’s president chairs Our company’s corporate governance framework is the Board of Directors. shown in Fig. 1. Decision-making and Supervision Auditing Management Committee 1. SMM's organizational structure is divided into three areas: Management Committee meetings are convened by the “Decision-making and Supervision,” performed by the Board of Directors Board of Corporate Independent Public president, executive vice president, senior managing Auditors Accountant Board of Directors; “Business Execution,” with the executive officers and other related executive officers president taking overall responsibility; and “Auditing.” and personnel. SMM’s outside directors and corporate 2. “Execution of Business” and fulfillment of “Social auditors may also attend. Responsibility” (CSR activity/internal controls) are viewed The Management Committee engages in broad-ranging Business Execution together as “Business Execution.” discussion on important matters which require a 3. The Management Committee discusses important matters resolution by the Board of Directors or the final approval President relating to the management of the company. It aims to of the president and which demand particularly careful promote rational business judgment and decision-making deliberation. The Committee decides for or against by deliberating issues in advance of meetings of the Board submission of matters to the Board of Directors and Execution of Business Social Responsibility of Directors, as well as efficient management and provides support on matters falling under the president’s appropriate internal controls. direct authority. Executive Officer Management CSR Committee Internal Controls Enterprise Value 4. The CSR Committee, chaired by the president, comprises Committee Committee Committee the heads of business divisions and corporate staff Executive Officer SMM adopted an executive officer system in June 2001. divisions. The committee was formed with two working Internal Audit Dept. Risk Management Execution of Business Efficient Resource groups and six subcommittees, when existing activities A provision was included in the articles of incorporation (Head Office div.) Working Group Utilization Subcommittee were restructured under the new program of CSR activities in June 2004 to clarify the status of executive officers. 3 Compliance Environmental Preservation on October 1, 2008. Executive officers are entrusted with important Working Group Subcommittee positions such as that of heads of business divisions or 5. The Internal Controls Committee, chaired by the president, 6 CSR Corporate Citizenship advances internal controls in line with the Japanese heads of corporate staff divisions and are conferred Subcommittees Subcommittee inherent authority for business execution. The progress Financial Instruments and Exchange Act of June 2006. In Human Rights & Human Resources compliance with the act, a report on the effectiveness of in execution of business affairs is reported to the Development Subcommittee Executive Officers’ Meeting once a month. Like for internal controls was submitted in June 2014, together with Occupational Health & Safety the company’s securities report for the year ended March directors, remuneration for executive officers is Subcommittee 2014, to the Director-General of the Kanto Local Finance determined according to a performance-based Communication Subcommittee Bureau after first obtaining an internal controls audit report remuneration system. recognizing its appropriateness from an auditing firm.

73 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 74 Corporate Governance and Management Aspects

Compliance Risk Management

4. Convene the Compliance Working Group business process and to determine courses of action, Basic Approach Confirmation of the compliance status in FY2013 by the Basic Approach bearing in mind their specific economic, environmental and The corporate activities of the SMM Group are founded Compliance Working Group indicated that there were The Corporate Reform Plan, formulated by SMM in April social circumstances. SMM has put together a framework upon principles of compliance. Though compliance is no major violations of laws or regulations relating to the 2000 based on reflections from the JCO criticality accident for risk management, establishing risk identification usually construed as applying to laws and regulations, the environment and products and services, including of 1999, acknowledged the importance of risk management guidelines along with various systems, including a risk SMM Group goes further, viewing compliance as the antitrust legislation. improvements for strengthening the company’s condition. registry, an in-house risk management auditing system and fulfillment of social and moral duties as a member of The Code of Conduct, too, stipulates that “all officers and risk management patrols. society through sound corporate activities. In 2000, the Speak Up System employees will incorporate risk management principles into The Risk Management Working Group, with close 1 In situations where problems or doubts remain after referring year after the JCO criticality accident of September 1999, the performance of their business operations or related affiliation to the Compliance Working Group, coordinates to the SMM Group Code of Conduct, and consultation with a the SMM Group formulated a “Corporate Reform Plan” and work.” risk management matters for the Group as a whole and superior fails to bring forth an appropriate response, embarked on a new beginning with three initial priorities: In August 2001, a Group-wide risk management system directs energy into preventing the actualization of risks. employees are able to report the matter directly through 1. Reconfirm and disseminate corporate philosophy; was established, structured upon features such as total Risk management systems have been introduced for several channels. In-house liaison is with the general 2. Strengthen the condition of the corporation; compliance. The purpose was to ensure SMM will never each business unit at business divisions throughout the managers of the Legal & General Affairs Department, the 3. Reform corporate culture. again cause a major incident. Regulations pertaining to risk Group, including at overseas group companies. We are Safety & Environmental Control Department, and the Internal The corporate philosophy and SMM Group Code of management systems were also established. Energy has also proceeding to introduce risk management systems at 2 Audit Department. Outside liaison is with the designated Conduct were consequently revised in 2004. been channeled into risk management initiatives ever since businesses that join the Group. At least once a year (or legal attorney. The source of the information is always kept Compliance—the first of 17 items included in the Code of as they are essential for business continuity. With the whenever the need arises), each division identifies and secret and if, for any reason, the informant is unfairly treated, Conduct—calls for conduct complying not only with laws launch of CSR activities in the autumn of 2008, the Risk assesses any unsafe behavior and other risks, and takes the person responsible will be punished appropriately. and rules, but also with social norms, as follows: Management Working Group set up under the CSR action to control them, registering or reviewing them as In FY2013, there were seven cases handled by the SMM Committee was charged with promoting initiatives, in the necessary, and implementing measures to prevent them liaisons. These comprised: three cases regarding ● Officers and employees will comply with foreign and same way that compliance initiatives, occupational health from recurring.3 employment control, two cases regarding power domestic laws and rules, and conform with social norms and safety activities and environmental management Self-checks by individual business divisions and various ● No officer or employee will under any circumstances harassment, one case regarding information posted on the activities were to be promoted. In addition to striving to audits4 are performed to assess whether risk management commit an infraction of the law or act counter to social Internet, and one case regarding relations with a supplier. norms, even if doing so would seem to be in the interests operate the system efficiently, SMM has also been working PDCA (Plan-Do-Check-Act) cycles are operating smoothly Appropriate measures are in place to deal with such of the company to raise the effectiveness of activities, such as reviewing and according to the rules and regulations. Findings are consultations. activities of focus to make them suited to the reflected in plans for the following fiscal year. 1. JCO criticality accident: On September 30, 1999, criticality occurred as uranium characteristics of each facility. In line with the FY2013 policy of “top management was being handled at an SMM subsidiary, JCO Co., Ltd. Two workers died from radiation injuries as a result. The radiation accident caused immeasurable suffering Compliance Seminars Since 2002, SMM has established regulations pertaining leading in even more vigilant risk management, to the local community, with citizens living close to the facility forced to evacuate. to the inherent safety of equipment and has been 2. The SMM Group Code of Conduct can be viewed in the “About Us” section of the The SMM Group commenced annual “compliance endeavoring to prevent risks from actualizing and taking SMM website: http://www.smm.co.jp/E/corp_info conferences” in 2001, giving employees an opportunity to implementing initiatives aimed at realizing safer equipment appropriate action if they do,” efforts were made to reaffirm their knowledge of compliance basics and learn and preventing occupational accidents throughout the strengthen the risk response of supervisors who support about the latest legislative changes. After deliberation on the SMM Group. Furthermore, to prevent more serious the top management, such as through carrying out drills objectives and structure of these conferences, the Group industrial accidents, we conduct risk assessments with clearly defined purposes. From a perspective of Compliance Management and Strengthening now implements compliance seminars in order to educate employing HAZOP (hazard and operability studies) and business continuity, efforts were also undertaken to other methods as part of our systematic safety evaluations Compliance management is performed according to our senior management of SMM and group companies about formulate business continuity plans (BCPs) for top-priority and measures at plants. Always leaning toward the side of basic compliance regulations. The Compliance Working the Code of Conduct and to ensure compliance with businesses. safety, SMM has been actively incorporating preventive Group of the CSR Committee plays a central role in work-related laws and ordinances. These seminars include approaches to risk management. 3. The Finance & Accounting Department, for example, uses various methods to compliance improvements and strengthening with education for personnel in charge of legal processes at each check accounting processes of the entire Group, which are performed according to uniform standards and procedures. Effort also goes into actually lowering risk represented divisions taking charge of the following main workplace involving introduction of specific case examples. through procedural improvements such as centralizing processes for payments to measures. In addition to seminars, guidance provided in the Climate Change Risk outside parties at Head Office. 4. Audits include risk management internal audits/inspections, audits by the Internal 1. Draft revisions to the SMM Group Code of Conduct workplace on an ongoing basis integrates Code of Conduct Potential risks for SMM in relation to climate change include Audit Department, investigation by the senior management of group divisions and audits by the Safety & Environment Control Department 2. Establish and revise compliance-related regulations dissemination, compliance with laws and rules, and CSR a raw materials shortage, which may occur if source mine · Basic compliance regulations awareness. operations are disrupted due, for example, to abnormal · Regulations on insider trading prevention and weather, and flooding of plants located in waterfront areas information management ■ Recipients of Compliance Education (FY2013) as a result of rising sea levels. In recent years, SMM has Issues and Targets · Regulations on the safeguarding of personal Type of seminar Target Participants been strengthening day-to-day energy conservation efforts From now on, we will be planning how to lower incidence information Compliance education Newly-appointed division general with the goal of reducing greenhouse gas emissions in (Basic course) managers and group company officers 74 and minimize damage in the case of a risk being · Export administration regulations order to combat global warming, which is believed to be a actualized, examining individual business continuity plans · Regulations for managing the legal process database General managers of business divisions, Compliance seminars administration departments, Head Office cause of abnormal weather. The company is also directing (BCPs) for the business and products, and meeting the · Regulations on the management of confidential (Advanced course) divisions and branch offices, presidents 71 efforts into the development of energy-saving refining demands of society. of subsidiaries in Japan, etc. information, etc. processes. Group seminar for Newly graduated employees and clerks At overseas locations, we are continuing to establish and 3. Implement compliance education new employees in the Head Office zone 32 implement stronger risk management systems, and we are A range of different training programs draw upon Seminar for newly promoted Employees newly promoted to E-class E-class employees 40 strengthening our preparedness in relation to international principles within the Sumitomo Business Spirit, SMM Frameworks and Initiatives Seminar for newly promoted Employees newly promoted to crises, such as kidnappings and terrorist activities. Group Corporate Philosophy and CSR Policy to ensure Compliance education section managers section manager 24 Risk management in the SMM Group is generally advanced Education for New mid-career employees through the efforts of individual business divisions. awareness among employees that compliance within mid-career employees 14 Business divisions seek to accurately identify the risks the SMM Group calls for ethics-based conduct and Personnel at section manager/senior staff decision-making, going beyond conformance with Compliance seminar for level in a position to provide guidance involved in managerial decision-making and within each site managers about compliance at each division/group 314 laws and regulations. company

75 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 76 Corporate Governance and Management Aspects

Compliance Risk Management

4. Convene the Compliance Working Group business process and to determine courses of action, Basic Approach Confirmation of the compliance status in FY2013 by the Basic Approach bearing in mind their specific economic, environmental and The corporate activities of the SMM Group are founded Compliance Working Group indicated that there were The Corporate Reform Plan, formulated by SMM in April social circumstances. SMM has put together a framework upon principles of compliance. Though compliance is no major violations of laws or regulations relating to the 2000 based on reflections from the JCO criticality accident for risk management, establishing risk identification usually construed as applying to laws and regulations, the environment and products and services, including of 1999, acknowledged the importance of risk management guidelines along with various systems, including a risk SMM Group goes further, viewing compliance as the antitrust legislation. improvements for strengthening the company’s condition. registry, an in-house risk management auditing system and fulfillment of social and moral duties as a member of The Code of Conduct, too, stipulates that “all officers and risk management patrols. society through sound corporate activities. In 2000, the Speak Up System employees will incorporate risk management principles into The Risk Management Working Group, with close 1 In situations where problems or doubts remain after referring year after the JCO criticality accident of September 1999, the performance of their business operations or related affiliation to the Compliance Working Group, coordinates to the SMM Group Code of Conduct, and consultation with a the SMM Group formulated a “Corporate Reform Plan” and work.” risk management matters for the Group as a whole and superior fails to bring forth an appropriate response, embarked on a new beginning with three initial priorities: In August 2001, a Group-wide risk management system directs energy into preventing the actualization of risks. employees are able to report the matter directly through 1. Reconfirm and disseminate corporate philosophy; was established, structured upon features such as total Risk management systems have been introduced for several channels. In-house liaison is with the general 2. Strengthen the condition of the corporation; compliance. The purpose was to ensure SMM will never each business unit at business divisions throughout the managers of the Legal & General Affairs Department, the 3. Reform corporate culture. again cause a major incident. Regulations pertaining to risk Group, including at overseas group companies. We are Safety & Environmental Control Department, and the Internal The corporate philosophy and SMM Group Code of management systems were also established. Energy has also proceeding to introduce risk management systems at 2 Audit Department. Outside liaison is with the designated Conduct were consequently revised in 2004. been channeled into risk management initiatives ever since businesses that join the Group. At least once a year (or legal attorney. The source of the information is always kept Compliance—the first of 17 items included in the Code of as they are essential for business continuity. With the whenever the need arises), each division identifies and secret and if, for any reason, the informant is unfairly treated, Conduct—calls for conduct complying not only with laws launch of CSR activities in the autumn of 2008, the Risk assesses any unsafe behavior and other risks, and takes the person responsible will be punished appropriately. and rules, but also with social norms, as follows: Management Working Group set up under the CSR action to control them, registering or reviewing them as In FY2013, there were seven cases handled by the SMM Committee was charged with promoting initiatives, in the necessary, and implementing measures to prevent them liaisons. These comprised: three cases regarding ● Officers and employees will comply with foreign and same way that compliance initiatives, occupational health from recurring.3 employment control, two cases regarding power domestic laws and rules, and conform with social norms and safety activities and environmental management Self-checks by individual business divisions and various ● No officer or employee will under any circumstances harassment, one case regarding information posted on the activities were to be promoted. In addition to striving to audits4 are performed to assess whether risk management commit an infraction of the law or act counter to social Internet, and one case regarding relations with a supplier. norms, even if doing so would seem to be in the interests operate the system efficiently, SMM has also been working PDCA (Plan-Do-Check-Act) cycles are operating smoothly Appropriate measures are in place to deal with such of the company to raise the effectiveness of activities, such as reviewing and according to the rules and regulations. Findings are consultations. activities of focus to make them suited to the reflected in plans for the following fiscal year. 1. JCO criticality accident: On September 30, 1999, criticality occurred as uranium characteristics of each facility. In line with the FY2013 policy of “top management was being handled at an SMM subsidiary, JCO Co., Ltd. Two workers died from radiation injuries as a result. The radiation accident caused immeasurable suffering Compliance Seminars Since 2002, SMM has established regulations pertaining leading in even more vigilant risk management, to the local community, with citizens living close to the facility forced to evacuate. to the inherent safety of equipment and has been 2. The SMM Group Code of Conduct can be viewed in the “About Us” section of the The SMM Group commenced annual “compliance endeavoring to prevent risks from actualizing and taking SMM website: http://www.smm.co.jp/E/corp_info conferences” in 2001, giving employees an opportunity to implementing initiatives aimed at realizing safer equipment appropriate action if they do,” efforts were made to reaffirm their knowledge of compliance basics and learn and preventing occupational accidents throughout the strengthen the risk response of supervisors who support about the latest legislative changes. After deliberation on the SMM Group. Furthermore, to prevent more serious the top management, such as through carrying out drills objectives and structure of these conferences, the Group industrial accidents, we conduct risk assessments with clearly defined purposes. From a perspective of Compliance Management and Strengthening now implements compliance seminars in order to educate employing HAZOP (hazard and operability studies) and business continuity, efforts were also undertaken to other methods as part of our systematic safety evaluations Compliance management is performed according to our senior management of SMM and group companies about formulate business continuity plans (BCPs) for top-priority and measures at plants. Always leaning toward the side of basic compliance regulations. The Compliance Working the Code of Conduct and to ensure compliance with businesses. safety, SMM has been actively incorporating preventive Group of the CSR Committee plays a central role in work-related laws and ordinances. These seminars include approaches to risk management. 3. The Finance & Accounting Department, for example, uses various methods to compliance improvements and strengthening with education for personnel in charge of legal processes at each check accounting processes of the entire Group, which are performed according to uniform standards and procedures. Effort also goes into actually lowering risk represented divisions taking charge of the following main workplace involving introduction of specific case examples. through procedural improvements such as centralizing processes for payments to measures. In addition to seminars, guidance provided in the Climate Change Risk outside parties at Head Office. 4. Audits include risk management internal audits/inspections, audits by the Internal 1. Draft revisions to the SMM Group Code of Conduct workplace on an ongoing basis integrates Code of Conduct Potential risks for SMM in relation to climate change include Audit Department, investigation by the senior management of group divisions and audits by the Safety & Environment Control Department 2. Establish and revise compliance-related regulations dissemination, compliance with laws and rules, and CSR a raw materials shortage, which may occur if source mine · Basic compliance regulations awareness. operations are disrupted due, for example, to abnormal · Regulations on insider trading prevention and weather, and flooding of plants located in waterfront areas information management ■ Recipients of Compliance Education (FY2013) as a result of rising sea levels. In recent years, SMM has Issues and Targets · Regulations on the safeguarding of personal Type of seminar Target Participants been strengthening day-to-day energy conservation efforts From now on, we will be planning how to lower incidence information Compliance education Newly-appointed division general with the goal of reducing greenhouse gas emissions in (Basic course) managers and group company officers 74 and minimize damage in the case of a risk being · Export administration regulations order to combat global warming, which is believed to be a actualized, examining individual business continuity plans · Regulations for managing the legal process database General managers of business divisions, Compliance seminars administration departments, Head Office cause of abnormal weather. The company is also directing (BCPs) for the business and products, and meeting the · Regulations on the management of confidential (Advanced course) divisions and branch offices, presidents 71 efforts into the development of energy-saving refining demands of society. of subsidiaries in Japan, etc. information, etc. processes. Group seminar for Newly graduated employees and clerks At overseas locations, we are continuing to establish and 3. Implement compliance education new employees in the Head Office zone 32 implement stronger risk management systems, and we are A range of different training programs draw upon Seminar for newly promoted Employees newly promoted to E-class E-class employees 40 strengthening our preparedness in relation to international principles within the Sumitomo Business Spirit, SMM Frameworks and Initiatives Seminar for newly promoted Employees newly promoted to crises, such as kidnappings and terrorist activities. Group Corporate Philosophy and CSR Policy to ensure Compliance education section managers section manager 24 Risk management in the SMM Group is generally advanced Education for New mid-career employees through the efforts of individual business divisions. awareness among employees that compliance within mid-career employees 14 Business divisions seek to accurately identify the risks the SMM Group calls for ethics-based conduct and Personnel at section manager/senior staff decision-making, going beyond conformance with Compliance seminar for level in a position to provide guidance involved in managerial decision-making and within each site managers about compliance at each division/group 314 laws and regulations. company

75 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 76 SMM’s Responses to Stakeholder Opinions Independent Assurance Report

Independent Assurance Report Main Comments on CSR Report 2013 from Employee Survey and SMM’s Responses To the President & Representative Director of Sumitomo Metal Mining Co., Ltd. (1,029 Survey Responses) We were engaged by Sumitomo Metal Mining Co., Ltd. (the “Company”) to undertake a limited assurance engagement of the environmental, social and economic performance indicators listed in the table below (the “Indicators”) for the period from April 1, 2013 to March 31, 2014 (the “Indicators”) included in its CSR Report 2014 (the “Report”) for the fiscal year ended March 31, 2014; the Company’s self-declaration on the Global Reporting Initiative (“the Area for Improvement Response GRI”) application level (A+); the alignment of the Company’s policies to the International Council on Mining and Metals (“ICMM”)’s 10 Sustainable Development (“SD”) Principles and the applicable mandatory requirements set out in ICMM position statements; the Company's identification and prioritization of material issues; the Company's approach and management of its material issues; and the completeness of material sustainability ● CSR activities have an image of being so big in scale, I find it information in the Report. ● We have included the following content to provide explanation difficult to take in their detail. Items Pages Indicators assured on how our business activities relate to social issues, and how ● As an employee, while I’m sure anything goes when it comes to Initiatives for Effective Use of Resources 18 Ratio of recycled materials used employees are involved: efforts outside the company, I reckon if the report introduced Initiatives in Global Warming Control 26 Unit energy and CO2 emissions index and CO2 emissions Volume of SOx emissions, Volume of NOx emissions, Volume of soot and dust emissions, COD and BOD pollutant loads, Water usage - We have introduced in detail the activities of many workplaces Initiatives for Reducing examples of activities already being done (like in this report), 27 - 30 (freshwater/seawater), Volume of waste (hazardous/non-hazardous), Final disposal volumes of industrial and mining waste in Japan, (including group companies), and explained as clearly as Environmental Impact Total release and transfer volume of PRTR substances and Breakdown of releases then it would probably lead to more people engaging in similar possible how our business relates to social issues. Material Flows within Business INPUT (Raw materials, Recycled materials, Energy, Materials and Water) and OUTPUT (Products, Emissions into the atmosphere, activities. Activity 31 Emissions into water and Waste including items of value) - Following on from last year, we have included examples of ● As members of the Group, what specifically should business Biodiversity Considerations 33 Size of production site in areas of high biodiversity value and Amount of land disturbed or rehabilitated everyday activities in the “My Way of Doing Good” segments. partners do? Human Rights Initiatives 47 Number of investments which have undergone human rights screening Total annual hours of education, Disabled employee ratio (SMM non-consolidated), Number of employees/officers worldwide People and Human 50 - 52 (consolidated), Number of employees/officers by region, Consolidated employee breakdown, Number of locally-hired senior managers Rights-related Data ● While I understand space is limited, I think the report would be (general managers and above) at overseas affiliates and Employee turnover number and percentage Occupational Health and Safety 58 Data on occupational accidents in Japan easier to understand if it was made more visual. ● We have reduced the number of topics that appear, and we Relations with Employees 63 Number of companies with workers’ unions and Percentages of employees belonging to workers’ unions ● The font is small and hard to read. Maybe too much detail has have made the photos and character fonts larger. Relations with Suppliers 67 Payments made to local suppliers been packed into the report. Strengthening Economic Ties with Distributed economic value, Financial assistance from the government and Projected benefit obligation to be funded by pension assets 72 Stakeholders and pension assets available for allocation to that obligation ● We have maintained the question-and-answer format again this Compliance 75 Recipients of compliance education ● The Q&A method used in the digest version for explaining what year. We have also included an introduction of the CSR CSR is was easy to understand. Future reports should keep this communication support officers assigned to each business The Company’s Responsibility The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s reporting criteria”), as section because every year there are new employees and division. If there is anything about CSR that you are wondering described in the Report, which are derived, among others, from the Sustainability Reporting Guidelines Version 3.0 of the GRI and Environmental Reporting others who are reading the CSR Report for the first time. about or want to know, please contact a CSR communication Guidelines of Japan’s Ministry of the Environment; self-declaring a GRI Application Level in conformance with the application level criteria stipulated by the GRI; reporting on the alignment of the Company’s policies to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM support officer or the CSR Committee Secretariat. position statements; reporting on the Company's identification and prioritization of material issues; reporting on the Company's approach and management of its material issues; and reporting on the completeness of material sustainability information in the Report. ● Having a history spanning 400 years is an advantage unique to ● In order to further deepen readers’ understanding about the Our Responsibility SMM, and so I think it was good to emphasize this in terms of SMM Group, this year, we put together a special feature on the Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We conducted our SMM’s “400-year legacy.” “Sumitomo Business Spirit.” engagement in accordance with ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements other than Audits or Reviews of Historical Financial Information’, ‘ISAE 3410, Assurance Engagements on Greenhouse Gas Statements’, issued by the International Auditing and Assurance Standards Board, and the ‘Practical Guidelines for the Assurance of Sustainability Information’ of J-SUS. The limited assurance engagement consisted of ● Having read the special feature on “Quality,” I understand that ● In this year’s report, we have created a page on SMM’s making inquiries, primarily of persons responsible for the preparation of information presented in the Report, and applying analytical and other procedures, and the procedures performed vary in nature from, and are less in extent than for, a reasonable assurance engagement. The level of assurance provided is high quality and production capacity are important, but it would approach to manufacturing, focusing on one product. The thus not as high as that provided by a reasonable assurance engagement. Our assurance procedures included: be better to communicate how they help in the outside world. article touches on how our products are used in the world. • Interviewing with the Company’s responsible personnel to obtain an understanding of its policy for the preparation of the Report and reviewing the Company’s reporting criteria. • Inquiring about the design of the systems and methods used to collect and process the Indicators. ● The subcommittee chairpersons were interviewed based on the • Performing analytical reviews of the Indicators. ● The comments made by the subcommittee chairpersons do not “Expectations for the SMM Group” provided by outside experts • Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with the Company’s reporting seem to match what the outside experts say in their criteria, and also recalculating the Indicators. in 2013 and 2014, and their views have been published in this • Visiting to the Company’s Harima Smelter selected on the basis of a risk analysis. “Expectations for the SMM Group.” • Evaluating the overall statement in which the Indicators are expressed. report. • Evaluating the Company’s self-declared GRI application level against the application level criteria. • Assessing the alignment of the Company’s policies to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM position ● There are many foreign words, written either in English or in ● Effort was made to make the katakana, English and technical statements through documentation reviews and interviews. • Interviewing with the Company's responsible personnel and reviewing documents with respect to the Company’s process of identifying and prioritizing its katakana. There are also some technical terms that I do not terms easier to understand by adding explanatory notes material issues and its approach to and management of its material issues. understand. wherever possible. • Assessment of whether or not all the material sustainability information defined by J-SUS is included in the Report. Conclusion Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that: • the Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described in the Report; • the Company’s self-declaration on the GRI application level does not conform to the application level criteria stipulated by the GRI; • the Company’s policies are not aligned to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM position statements as Positive Feedback described on pages 41 and 42; • the Company has not identified and prioritized its material issues as described on page 2; ● It felt like this year’s report was a lot easier to understand than last ● This year’s CSR Report was again easy to read. Being inside a • the Company has not approached and managed its material issues as described on pages 15, 16, 21, 22, 37, 38, 45, 46, 55, 56, 61 and 62; and year’s. From reading the “My Way of Doing Good” segments, I was plant all the time, I tend to be ill-informed about the world outside, • all the material sustainability information defined by J-SUS is not included in the Report. able to learn a little about everyone’s efforts, and so I hope this and so I read the report with great interest. Our Independence and Quality Control We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which includes segment continues. ● I realized for the first time that SMM boasts one of greatest independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and ● I felt that this CSR Report was very useful because I was able to processing capacities in Japan for recycling zinc using professional behavior. In accordance with International Standard on Quality Control 1, we maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory find out about the views of the SMM President and other officers. proprietary technology. I hope that future reports continue to requirements. ● This report was informative and it enabled me to appreciate how provide information in a way that is easy for me to understand. everyone in the SMM Group is actively involved in their respective ● It was good that the report incorporated plenty of local and KPMG AZSA Sustainability Co., Ltd. jobs, divisions and disciplines. overseas endeavors. Tokyo, Japan ● From reading the CSR Report, I was able to find out about the October 21, 2014 SMM Group’s overall site operations and issues, and also about the new targets. As a testament to the reliability of the sustainability information in this report SMM is authorized to attach the mark shown above, which indicates that the report meets the standards for sustainability report assurance and registration established by the Japanese Association of Assurance 77 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 Organizations for Sustainability Information (http://j-sus.org/english.html). SUMITOMO METAL MINING CO., LTD. CSR Report 2014 78 SMM’s Responses to Stakeholder Opinions Independent Assurance Report

Independent Assurance Report Main Comments on CSR Report 2013 from Employee Survey and SMM’s Responses To the President & Representative Director of Sumitomo Metal Mining Co., Ltd. (1,029 Survey Responses) We were engaged by Sumitomo Metal Mining Co., Ltd. (the “Company”) to undertake a limited assurance engagement of the environmental, social and economic performance indicators listed in the table below (the “Indicators”) for the period from April 1, 2013 to March 31, 2014 (the “Indicators”) included in its CSR Report 2014 (the “Report”) for the fiscal year ended March 31, 2014; the Company’s self-declaration on the Global Reporting Initiative (“the Area for Improvement Response GRI”) application level (A+); the alignment of the Company’s policies to the International Council on Mining and Metals (“ICMM”)’s 10 Sustainable Development (“SD”) Principles and the applicable mandatory requirements set out in ICMM position statements; the Company's identification and prioritization of material issues; the Company's approach and management of its material issues; and the completeness of material sustainability ● CSR activities have an image of being so big in scale, I find it information in the Report. ● We have included the following content to provide explanation difficult to take in their detail. Items Pages Indicators assured on how our business activities relate to social issues, and how ● As an employee, while I’m sure anything goes when it comes to Initiatives for Effective Use of Resources 18 Ratio of recycled materials used employees are involved: efforts outside the company, I reckon if the report introduced Initiatives in Global Warming Control 26 Unit energy and CO2 emissions index and CO2 emissions Volume of SOx emissions, Volume of NOx emissions, Volume of soot and dust emissions, COD and BOD pollutant loads, Water usage - We have introduced in detail the activities of many workplaces Initiatives for Reducing examples of activities already being done (like in this report), 27 - 30 (freshwater/seawater), Volume of waste (hazardous/non-hazardous), Final disposal volumes of industrial and mining waste in Japan, (including group companies), and explained as clearly as Environmental Impact Total release and transfer volume of PRTR substances and Breakdown of releases then it would probably lead to more people engaging in similar possible how our business relates to social issues. Material Flows within Business INPUT (Raw materials, Recycled materials, Energy, Materials and Water) and OUTPUT (Products, Emissions into the atmosphere, activities. Activity 31 Emissions into water and Waste including items of value) - Following on from last year, we have included examples of ● As members of the Group, what specifically should business Biodiversity Considerations 33 Size of production site in areas of high biodiversity value and Amount of land disturbed or rehabilitated everyday activities in the “My Way of Doing Good” segments. partners do? Human Rights Initiatives 47 Number of investments which have undergone human rights screening Total annual hours of education, Disabled employee ratio (SMM non-consolidated), Number of employees/officers worldwide People and Human 50 - 52 (consolidated), Number of employees/officers by region, Consolidated employee breakdown, Number of locally-hired senior managers Rights-related Data ● While I understand space is limited, I think the report would be (general managers and above) at overseas affiliates and Employee turnover number and percentage Occupational Health and Safety 58 Data on occupational accidents in Japan easier to understand if it was made more visual. ● We have reduced the number of topics that appear, and we Relations with Employees 63 Number of companies with workers’ unions and Percentages of employees belonging to workers’ unions ● The font is small and hard to read. Maybe too much detail has have made the photos and character fonts larger. Relations with Suppliers 67 Payments made to local suppliers been packed into the report. Strengthening Economic Ties with Distributed economic value, Financial assistance from the government and Projected benefit obligation to be funded by pension assets 72 Stakeholders and pension assets available for allocation to that obligation ● We have maintained the question-and-answer format again this Compliance 75 Recipients of compliance education ● The Q&A method used in the digest version for explaining what year. We have also included an introduction of the CSR CSR is was easy to understand. Future reports should keep this communication support officers assigned to each business The Company’s Responsibility The Company is responsible for the preparation of the Indicators in accordance with its own reporting criteria (the “Company’s reporting criteria”), as section because every year there are new employees and division. If there is anything about CSR that you are wondering described in the Report, which are derived, among others, from the Sustainability Reporting Guidelines Version 3.0 of the GRI and Environmental Reporting others who are reading the CSR Report for the first time. about or want to know, please contact a CSR communication Guidelines of Japan’s Ministry of the Environment; self-declaring a GRI Application Level in conformance with the application level criteria stipulated by the GRI; reporting on the alignment of the Company’s policies to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM support officer or the CSR Committee Secretariat. position statements; reporting on the Company's identification and prioritization of material issues; reporting on the Company's approach and management of its material issues; and reporting on the completeness of material sustainability information in the Report. ● Having a history spanning 400 years is an advantage unique to ● In order to further deepen readers’ understanding about the Our Responsibility SMM, and so I think it was good to emphasize this in terms of SMM Group, this year, we put together a special feature on the Our responsibility is to express a limited assurance conclusion on the Indicators based on the procedures we have performed. We conducted our SMM’s “400-year legacy.” “Sumitomo Business Spirit.” engagement in accordance with ‘International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements other than Audits or Reviews of Historical Financial Information’, ‘ISAE 3410, Assurance Engagements on Greenhouse Gas Statements’, issued by the International Auditing and Assurance Standards Board, and the ‘Practical Guidelines for the Assurance of Sustainability Information’ of J-SUS. The limited assurance engagement consisted of ● Having read the special feature on “Quality,” I understand that ● In this year’s report, we have created a page on SMM’s making inquiries, primarily of persons responsible for the preparation of information presented in the Report, and applying analytical and other procedures, and the procedures performed vary in nature from, and are less in extent than for, a reasonable assurance engagement. The level of assurance provided is high quality and production capacity are important, but it would approach to manufacturing, focusing on one product. The thus not as high as that provided by a reasonable assurance engagement. Our assurance procedures included: be better to communicate how they help in the outside world. article touches on how our products are used in the world. • Interviewing with the Company’s responsible personnel to obtain an understanding of its policy for the preparation of the Report and reviewing the Company’s reporting criteria. • Inquiring about the design of the systems and methods used to collect and process the Indicators. ● The subcommittee chairpersons were interviewed based on the • Performing analytical reviews of the Indicators. ● The comments made by the subcommittee chairpersons do not “Expectations for the SMM Group” provided by outside experts • Examining, on a test basis, evidence supporting the generation, aggregation and reporting of the Indicators in conformity with the Company’s reporting seem to match what the outside experts say in their criteria, and also recalculating the Indicators. in 2013 and 2014, and their views have been published in this • Visiting to the Company’s Harima Smelter selected on the basis of a risk analysis. “Expectations for the SMM Group.” • Evaluating the overall statement in which the Indicators are expressed. report. • Evaluating the Company’s self-declared GRI application level against the application level criteria. • Assessing the alignment of the Company’s policies to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM position ● There are many foreign words, written either in English or in ● Effort was made to make the katakana, English and technical statements through documentation reviews and interviews. • Interviewing with the Company's responsible personnel and reviewing documents with respect to the Company’s process of identifying and prioritizing its katakana. There are also some technical terms that I do not terms easier to understand by adding explanatory notes material issues and its approach to and management of its material issues. understand. wherever possible. • Assessment of whether or not all the material sustainability information defined by J-SUS is included in the Report. Conclusion Based on the procedures performed, as described above, nothing has come to our attention that causes us to believe that: • the Indicators in the Report are not prepared, in all material respects, in accordance with the Company’s reporting criteria as described in the Report; • the Company’s self-declaration on the GRI application level does not conform to the application level criteria stipulated by the GRI; • the Company’s policies are not aligned to the ICMM’s 10 SD Principles and the applicable mandatory requirements set out in ICMM position statements as Positive Feedback described on pages 41 and 42; • the Company has not identified and prioritized its material issues as described on page 2; ● It felt like this year’s report was a lot easier to understand than last ● This year’s CSR Report was again easy to read. Being inside a • the Company has not approached and managed its material issues as described on pages 15, 16, 21, 22, 37, 38, 45, 46, 55, 56, 61 and 62; and year’s. From reading the “My Way of Doing Good” segments, I was plant all the time, I tend to be ill-informed about the world outside, • all the material sustainability information defined by J-SUS is not included in the Report. able to learn a little about everyone’s efforts, and so I hope this and so I read the report with great interest. Our Independence and Quality Control We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, which includes segment continues. ● I realized for the first time that SMM boasts one of greatest independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and ● I felt that this CSR Report was very useful because I was able to processing capacities in Japan for recycling zinc using professional behavior. In accordance with International Standard on Quality Control 1, we maintain a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory find out about the views of the SMM President and other officers. proprietary technology. I hope that future reports continue to requirements. ● This report was informative and it enabled me to appreciate how provide information in a way that is easy for me to understand. everyone in the SMM Group is actively involved in their respective ● It was good that the report incorporated plenty of local and KPMG AZSA Sustainability Co., Ltd. jobs, divisions and disciplines. overseas endeavors. Tokyo, Japan ● From reading the CSR Report, I was able to find out about the October 21, 2014 SMM Group’s overall site operations and issues, and also about the new targets. As a testament to the reliability of the sustainability information in this report SMM is authorized to attach the mark shown above, which indicates that the report meets the standards for sustainability report assurance and registration established by the Japanese Association of Assurance 77 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 Organizations for Sustainability Information (http://j-sus.org/english.html). SUMITOMO METAL MINING CO., LTD. CSR Report 2014 78 Item GRI Content Index Profile Indication Relevant Page(s) 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). Boundary of the Report (2) To show that reports are based upon the GRI Reporting Framework, SMM declares the reporting level using the GRI system of 3.7 State any specific limitations on the scope or boundary of the report. Boundary of the Report (2) “application levels.” Application levels are classified as indicated in the diagram below. Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and 3.8 other entities that can significantly affect comparability from period to period and/or between Boundary of the Report (2) This report is aligned with the GRI Sustainability Reporting Guidelines, Version 3.0, at an application level of A+. This declaration is organizations. Initiatives in Global Warming Control (26) covered in assurance provided by KPMG AZSA Sustainability Co., Ltd. Data measurement techniques and the bases of calculations, including assumptions and 3.9 techniques underlying estimations applied to the compilation of the Indicators and other Initiatives for Reducing Environmental information in the report. Impact (27-28) Material Flows within Business Activity (31) Explanation of the effect of any re-statements of information provided in earlier reports, and the Report Application Level 3.10 reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature N/A CC+ BB+ A A+ of business, measurement methods). Report on: Report on all criteria listed for Significant changes from previous reporting periods in the scope, boundary, or measurement 3.11 Boundary of the Report (2) 1.1 Level C plus: methods applied in the report. G3 Profile 2.1-2.10 1.2 Same as requirement for Level B Disclosures 3.1-3.8, 3.10-3.12 3.9, 3.13 GRI Content Index OUTPUT 4.1-4.4, 4.14-4.15 4.5-4.13, 4.16-4.17 3.12 Table identifying the location of the Standard Disclosures in the report. GRI Content Index Assurance G3 Management Management Approach Standard Management Approach Disclosures Policy and current practice with regard to seeking external assurance for the report. If not included Approach Not Required Disclosures for each Disclosures for each Indicator Category in the assurance report accompanying the sustainability report, explain the scope and basis of any Disclosures Indicator Category 3.13 Independent Assurance Report (78)

OUTPUT external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s).

Report on a minimum of Report Externally Assured Report on each core G3 and

G3 Performance Report Externally Assured Report on a minimum of Report Externally Assured 10 Performance Indicators, Sector Supplement* indicator with Indicators & 20 Performance Indicators, at least at least one from each of: due regard to the Materiality Principle 4. Governance, Commitments, and Engagement Sector Supplement one from each of: economic, economic, environment, by either: Performance environment, human rights, labor, Governance OUTPUT human rights, labor, society, a) reporting on the indicator or Indicators society, product responsibility. product responsibility. b) explaining the reason for its omission. Governance structure of the organization, including committees under the highest governance 4.1 Corporate Governance (73-74) body responsible for specific tasks, such as setting strategy or organizational oversight. * The Mining & Metals Sector Supplement of the GRI’s G3 Guidelines is used for this report Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, 4.2 Corporate Governance (73-74) their function within the organization’ s management and the reasons for this arrangement). Item Indication Relevant Page(s) Profile For organizations that have a unitary board structure, state the number of members of the highest 4.3 Corporate Governance (73-74) governance body that are independent and/or non-executive members. 1. Strategy and Analysis Relations with Employees (63) Statement from the most senior decision maker of the organization (e.g., CEO, chair, or equivalent Mechanisms for shareholders and employees to provide recommendations or direction to the Relations with Shareholders and 1.1 senior position) about the relevance of sustainability to the organization and its strategy. Interview with the President (3-4) 4.4 highest governance body. Investors (64) Corporate Governance (73-74) Interview with the President (3-4) 1.2 Description of key impacts, risks, and opportunities. Linkage between compensation for members of the highest governance body, senior managers, Risk Management (76) 4.5 and executives (including departure arrangements), and the organization’s performance Corporate Governance (73-74) (including social and environmental performance). 2. Organizational Profile 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided. Corporate Governance (73-74) 2.1 Name of the organization. Overview of Business Operations (5-6) Process for determining the qualifications and expertise of the members of the highest governance 4.7 body for guiding the organization’s strategy on economic, environmental, and social topics. Corporate Governance (74) 2.2 Primary brands, products, and/or services. Overview of Business Operations (5-6) Internally developed statements of mission or values, codes of conduct, and principles relevant to Corporate Philosophy for a Sustainable Society (7) Operational structure of the organization, including main divisions, operating companies, 4.8 2.3 Overview of Business Operations (5-6) economic, environmental, and social performance and the status of their implementation. Six Key CSR Areas and Vision for 2020 (8) subsidiaries, and joint ventures. Procedures of the highest governance body for overseeing the organization’s identification and 2.4 Location of organization’s headquarters. Overview of Business Operations (5-6) management of economic, environmental, and social performance, including relevant risks and 4.9 CSR Promotion Framework (9) Number of countries where the organization operates, and names of countries with either major opportunities, and adherence or compliance with internationally agreed standards, codes of Relations with Society (41-42) 2.5 Overview of Business Operations (5-6) operations or that are specifically relevant to the sustainability issues covered in the report. conduct, and principles. 2.6 Nature of ownership and legal form. Overview of Business Operations (5-6) Processes for evaluating the highest governance body’s own performance, particularly with CSR Promotion Framework (9) 4.10 respect to economic, environmental, and social performance. Markets served (including geographic breakdown, sectors served, and types of Overview of Business Operations (5-6) 2.7 customers/beneficiaries). Commitments to External Initiatives Scale of the reporting organization, including: • Number of employees; Biodiversity Considerations (33-34) Overview of Business Operations (5-6) • Net sales (for private sector organizations) or net revenues (for public sector organizations); Explanation of whether and how the precautionary approach or principle is addressed by the Initiatives in Global Warming Control 2.8 Strengthening Economic Ties with 4.11 • Total capitalization broken down in terms of debt and equity (for private sector organizations); organization. (25-26) Stakeholders (71-72) and Risk Management (76) • Quantity of products or services provided. Externally developed economic, environmental, and social charters, principles, or other initiatives Significant changes during the reporting period regarding size, structure, or ownership including: 4.12 Relations with Society (41-42) • The location of, or changes in operations, including facility openings, closings, and expansions; to which the organization subscribes or endorses. 2.9 and N/A • Changes in the share capital structure and other capital formation, maintenance, and alteration Memberships in associations (such as industry associations) and/or national/international operations (for private sector organizations). advocacy organizations in which the organization: • Has positions in governance bodies; 4.13 Relations with Society (41) 2.10 Awards received in the reporting period. Relations with Society (40) • Participates in projects or committees; • Provides substantive funding beyond routine membership dues; or • Views membership as strategic. 3. Report Parameters Stakeholder Engagement Report Profile 4.14 List of stakeholder groups engaged by the organization. Our Stakeholders (10) 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. Period Covered (2) 4.15 Basis for identification and selection of stakeholders with whom to engage. Our Stakeholders (10) 3.2 Date of most recent previous report (if any). Publication Date (2) Our Stakeholders (10) 3.3 Reporting cycle (annual, biennial, etc.) Publication Date (2) Initiatives in the Six Key CSR Areas: 3.4 Contact point for questions regarding the report or its contents. Enquiries (2) Stakeholder Communication (61-62) Relations with Employees (63) Approaches to stakeholder engagement, including frequency of engagement by type and by Report Scope and Boundary 4.16 Relations with Shareholders and stakeholder group. Investors (64) Process for defining report content, including: Relations with Customers (65-66) • Determining materiality; Editorial Policy (2) Relations with Suppliers (67-68) 3.5 • Prioritizing topics within the report; and Our Stakeholders (10) Examples of Communication with • Identifying stakeholders the organization expects to use the report. Other Stakeholders (68)

79 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 80 Item GRI Content Index Profile Indication Relevant Page(s) 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). Boundary of the Report (2) To show that reports are based upon the GRI Reporting Framework, SMM declares the reporting level using the GRI system of 3.7 State any specific limitations on the scope or boundary of the report. Boundary of the Report (2) “application levels.” Application levels are classified as indicated in the diagram below. Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and 3.8 other entities that can significantly affect comparability from period to period and/or between Boundary of the Report (2) This report is aligned with the GRI Sustainability Reporting Guidelines, Version 3.0, at an application level of A+. This declaration is organizations. Initiatives in Global Warming Control (26) covered in assurance provided by KPMG AZSA Sustainability Co., Ltd. Data measurement techniques and the bases of calculations, including assumptions and 3.9 techniques underlying estimations applied to the compilation of the Indicators and other Initiatives for Reducing Environmental information in the report. Impact (27-28) Material Flows within Business Activity (31) Explanation of the effect of any re-statements of information provided in earlier reports, and the Report Application Level 3.10 reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature N/A CC+ BB+ A A+ of business, measurement methods). Report on: Report on all criteria listed for Significant changes from previous reporting periods in the scope, boundary, or measurement 3.11 Boundary of the Report (2) 1.1 Level C plus: methods applied in the report. G3 Profile 2.1-2.10 1.2 Same as requirement for Level B Disclosures 3.1-3.8, 3.10-3.12 3.9, 3.13 GRI Content Index OUTPUT 4.1-4.4, 4.14-4.15 4.5-4.13, 4.16-4.17 3.12 Table identifying the location of the Standard Disclosures in the report. GRI Content Index Assurance G3 Management Management Approach Standard Management Approach Disclosures Policy and current practice with regard to seeking external assurance for the report. If not included Approach Not Required Disclosures for each Disclosures for each Indicator Category in the assurance report accompanying the sustainability report, explain the scope and basis of any Disclosures Indicator Category 3.13 Independent Assurance Report (78)

OUTPUT external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s).

Report on a minimum of Report Externally Assured Report on each core G3 and

G3 Performance Report Externally Assured Report on a minimum of Report Externally Assured 10 Performance Indicators, Sector Supplement* indicator with Indicators & 20 Performance Indicators, at least at least one from each of: due regard to the Materiality Principle 4. Governance, Commitments, and Engagement Sector Supplement one from each of: economic, economic, environment, by either: Performance environment, human rights, labor, Governance OUTPUT human rights, labor, society, a) reporting on the indicator or Indicators society, product responsibility. product responsibility. b) explaining the reason for its omission. Governance structure of the organization, including committees under the highest governance 4.1 Corporate Governance (73-74) body responsible for specific tasks, such as setting strategy or organizational oversight. * The Mining & Metals Sector Supplement of the GRI’s G3 Guidelines is used for this report Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, 4.2 Corporate Governance (73-74) their function within the organization’ s management and the reasons for this arrangement). Item Indication Relevant Page(s) Profile For organizations that have a unitary board structure, state the number of members of the highest 4.3 Corporate Governance (73-74) governance body that are independent and/or non-executive members. 1. Strategy and Analysis Relations with Employees (63) Statement from the most senior decision maker of the organization (e.g., CEO, chair, or equivalent Mechanisms for shareholders and employees to provide recommendations or direction to the Relations with Shareholders and 1.1 senior position) about the relevance of sustainability to the organization and its strategy. Interview with the President (3-4) 4.4 highest governance body. Investors (64) Corporate Governance (73-74) Interview with the President (3-4) 1.2 Description of key impacts, risks, and opportunities. Linkage between compensation for members of the highest governance body, senior managers, Risk Management (76) 4.5 and executives (including departure arrangements), and the organization’s performance Corporate Governance (73-74) (including social and environmental performance). 2. Organizational Profile 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided. Corporate Governance (73-74) 2.1 Name of the organization. Overview of Business Operations (5-6) Process for determining the qualifications and expertise of the members of the highest governance 4.7 body for guiding the organization’s strategy on economic, environmental, and social topics. Corporate Governance (74) 2.2 Primary brands, products, and/or services. Overview of Business Operations (5-6) Internally developed statements of mission or values, codes of conduct, and principles relevant to Corporate Philosophy for a Sustainable Society (7) Operational structure of the organization, including main divisions, operating companies, 4.8 2.3 Overview of Business Operations (5-6) economic, environmental, and social performance and the status of their implementation. Six Key CSR Areas and Vision for 2020 (8) subsidiaries, and joint ventures. Procedures of the highest governance body for overseeing the organization’s identification and 2.4 Location of organization’s headquarters. Overview of Business Operations (5-6) management of economic, environmental, and social performance, including relevant risks and 4.9 CSR Promotion Framework (9) Number of countries where the organization operates, and names of countries with either major opportunities, and adherence or compliance with internationally agreed standards, codes of Relations with Society (41-42) 2.5 Overview of Business Operations (5-6) operations or that are specifically relevant to the sustainability issues covered in the report. conduct, and principles. 2.6 Nature of ownership and legal form. Overview of Business Operations (5-6) Processes for evaluating the highest governance body’s own performance, particularly with CSR Promotion Framework (9) 4.10 respect to economic, environmental, and social performance. Markets served (including geographic breakdown, sectors served, and types of Overview of Business Operations (5-6) 2.7 customers/beneficiaries). Commitments to External Initiatives Scale of the reporting organization, including: • Number of employees; Biodiversity Considerations (33-34) Overview of Business Operations (5-6) • Net sales (for private sector organizations) or net revenues (for public sector organizations); Explanation of whether and how the precautionary approach or principle is addressed by the Initiatives in Global Warming Control 2.8 Strengthening Economic Ties with 4.11 • Total capitalization broken down in terms of debt and equity (for private sector organizations); organization. (25-26) Stakeholders (71-72) and Risk Management (76) • Quantity of products or services provided. Externally developed economic, environmental, and social charters, principles, or other initiatives Significant changes during the reporting period regarding size, structure, or ownership including: 4.12 Relations with Society (41-42) • The location of, or changes in operations, including facility openings, closings, and expansions; to which the organization subscribes or endorses. 2.9 and N/A • Changes in the share capital structure and other capital formation, maintenance, and alteration Memberships in associations (such as industry associations) and/or national/international operations (for private sector organizations). advocacy organizations in which the organization: • Has positions in governance bodies; 4.13 Relations with Society (41) 2.10 Awards received in the reporting period. Relations with Society (40) • Participates in projects or committees; • Provides substantive funding beyond routine membership dues; or • Views membership as strategic. 3. Report Parameters Stakeholder Engagement Report Profile 4.14 List of stakeholder groups engaged by the organization. Our Stakeholders (10) 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. Period Covered (2) 4.15 Basis for identification and selection of stakeholders with whom to engage. Our Stakeholders (10) 3.2 Date of most recent previous report (if any). Publication Date (2) Our Stakeholders (10) 3.3 Reporting cycle (annual, biennial, etc.) Publication Date (2) Initiatives in the Six Key CSR Areas: 3.4 Contact point for questions regarding the report or its contents. Enquiries (2) Stakeholder Communication (61-62) Relations with Employees (63) Approaches to stakeholder engagement, including frequency of engagement by type and by Report Scope and Boundary 4.16 Relations with Shareholders and stakeholder group. Investors (64) Process for defining report content, including: Relations with Customers (65-66) • Determining materiality; Editorial Policy (2) Relations with Suppliers (67-68) 3.5 • Prioritizing topics within the report; and Our Stakeholders (10) Examples of Communication with • Identifying stakeholders the organization expects to use the report. Other Stakeholders (68)

79 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 80 Item Item Profile Indication Relevant Page(s) Profile Indication Relevant Page(s)

Our Stakeholders (10) EN14 ADD Strategies, current actions, and future plans for managing impacts on biodiversity. Biodiversity Considerations (33-34) Initiatives in the Six Key CSR Areas: Contribution to Society and Local Communities Number of IUCN Red List species and national conservation list species with habitats in areas (37-38) affected by operations, by level of extinction risk. Human Rights Initiatives (47) EN15 ADD Biodiversity Considerations (33-34) Initiatives Relating to Employee Diversity (49) Initiatives in the Six Key CSR Areas: Key topics and concerns that have been raised through stakeholder engagement, and how Stakeholder Communication (61-62) Amount of land (owned or leased, and managed for production activities or extractive use) 4.17 MM1 Biodiversity Considerations (33) the organization has responded to those key topics and concerns, including through its Relations with Employees (63) disturbed or rehabilitated. reporting. Relations with Shareholders and Investors (64) Relations with Customers (65-66) The number and percentage of total sites identified as requiring biodiversity management plans Relations with Suppliers (67-68) MM2 according to stated criteria, and the number (percentage) of those sites with plans in place. Biodiversity Considerations (33) Examples of Communication with Other Stakeholders (68) Aspect: Emissions, Effluents, and Waste SMM’s Responses to Stakeholder Opinions (77) Initiatives in Global Warming Control (26) EN16 CORE Total direct and indirect greenhouse gas emissions by weight. Material Flows within Business Activity (31) 5. Management Approach and Performance Indicators Initiatives in Global Warming Control (26) Economic EN17 CORE Other relevant indirect greenhouse gas emissions by weight. Material Flows within Business Activity (31) Relations with Society (39-42) Disclosure on Management Approach Strengthening Economic Ties with EN18 ADD Initiatives to reduce greenhouse gas emissions and reductions achieved. Initiatives in Global Warming Control (25-26) Stakeholders (71-72) Aspect: Economic Performance EN19 CORE Emissions of ozone-depleting substances by weight. Initiatives for Reducing Environmental Impact (29) Direct economic value generated and distributed, including revenues, operating costs, Relations with Society (39) EN20 CORE NO, SO, and other significant air emissions by type and weight. Initiatives for Reducing Environmental Impact (27) EC1 CORE employee compensation, donations and other community investments, retained earnings, Strengthening Economic Ties with and payments to capital providers and governments. Stakeholders (71-72) Initiatives for Reducing Environmental Impact (27-28) Financial implications and other risks and opportunities for the organization’s activities due to EN21 CORE Total water discharge by quality and destination. EC2 CORE Risk Management (76) Material Flows within Business Activity (31) climate change. EC3 CORE Coverage of the organization’s defined benefit plan obligations. Strengthening Economic Ties with Stakeholders (71-72) Initiatives for Reducing Environmental Impact (28) EN22 CORE Total weight of waste by type and disposal method. Material Flows within Business Activity (31) EC4 CORE Significant financial assistance received from government. Strengthening Economic Ties with Stakeholders (71-72)

Aspect: Market Presence EN23 CORE Total number and volume of significant spills. Initiatives in Environmental Preservation (24) Range of ratios of standard entry level wage compared to local minimum wage at significant EC5 ADD — Weight of transported, imported, exported, or treated waste deemed hazardous under the locations of operation. EN24 ADD terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste — Policy, practices, and proportion of spending on locally-based suppliers at significant locations Relations with Society (39) shipped internationally. EC6 CORE of operation. Relations with Suppliers (67) Identity, size, protected status, and biodiversity value of water bodies and related habitats EN25 ADD — Relations with Society (39) significantly affected by the reporting organization’s discharges of water and runoff. Procedures for local hiring and proportion of senior management hired and workforce from EC7 CORE Initiatives Relating to Employee Diversity (49) the local community at locations of significant operation. People and Human Rights-related Data (51) MM3 Total amounts of overburden, rock, tailings, and sludges and their associated risks. Initiatives for Reducing Environmental Impact (29) Material Flows within Business Activity (31) Aspect: Indirect Economic Impacts Initiatives in the Six Key CSR Areas: Contribution Aspect: Products and Services Development and impact of infrastructure investments and services provided primarily for EC8 CORE to Society and Local Communities (37-38) public benefit through commercial, in-kind, or pro bono engagement. CORE Initiatives to mitigate environmental impacts of products and services, and extent of impact Initiatives in Creating Products with Relations with Society (39) EN26 mitigation. Low Environmental Impact (32) EC9 ADD Understanding and describing significant indirect economic impacts, including the extent of impacts. — EN27 CORE Percentage of products sold and their packaging materials that are reclaimed by category. Initiatives for Effective Use of Resources (18)

Environmental Aspect: Compliance Initiatives in the Six Key CSR Areas: Effective Use of Resources (15-16) Monetary value of significant fines and total number of non-monetary sanctions for Disclosure on Management Approach Initiatives in the Six Key CSR Areas: Environmental Preservation (21-22) EN28 CORE non-compliance with environmental laws and regulations. Compliance (75) Initiatives in Environmental Preservation (23-24) Aspect: Transport Aspect: Materials Significant environmental impacts of transporting products and other goods and materials EN29 ADD — Initiatives for Effective Use of Resources (18) used for the organization’s operations, and transporting members of the workforce. EN1 CORE Materials used by weight or volume. Material Flows within Business Activity (31) Aspect: Overall Initiatives for Effective Use of Resources (18) EN2 CORE Percentage of materials used that are recycled input materials. Material Flows within Business Activity (31) EN30 ADD Total environmental protection expenditures and investments by type. —

Aspect: Energy Labor Practices and Decent Work EN3 CORE Direct energy consumption by primary energy source. Material Flows within Business Activity (31) Initiatives in the Six Key CSR Areas: EN4 CORE Indirect energy consumption by primary source. Material Flows within Business Activity (31) Respect for People and Human Rights (45-46) Disclosure on Management Approach Initiatives in the Six Key CSR Areas: EN5 ADD Energy saved due to conservation and efficiency improvements. Initiatives in the Six Key CSR Areas: Environmental Preservation (21) Occupational Health and Safety (55-56) Relations with Employees (63) Initiatives to provide energy-efficient or renewable energy based products and services, and Initiatives in the Six Key CSR Areas: Environmental Preservation (21-22) EN6 ADD reductions in energy requirements as a result of these initiatives. Initiatives in Creating Products with Low Environmental Impact (32) Aspect: Employment EN7 ADD Initiatives to reduce indirect energy consumption and reductions achieved. — LA1 CORE Total workforce by employment type, employment contract, and region. People and Human Rights-related Data (51) Aspect: Water LA2 CORE Total number and rate of employee turnover by age group, gender, and region. People and Human Rights-related Data (52) Initiatives in Creating Products with Low Environmental Impact (28) EN8 CORE Total water withdrawal by source. Benefits provided to full-time employees that are not provided to temporary or part-time Material Flows within Business Activity (31) LA3 ADD employees, by major operations. — EN9 ADD Water sources significantly affected by withdrawal of water. — Aspect: Labor/Management Relations

EN10 ADD Percentage and total volume of water recycled and reused. — LA4 CORE Percentage of employees covered by collective bargaining agreements. Relations with Employees (63) Minimum notice period(s) regarding operational changes, including whether it is specified in Aspect: Biodiversity LA5 CORE collective agreements. Relations with Employees (63)

Location and size of land owned, leased, managed in, or adjacent to, protected areas and MM4 Number of strikes and lock-outs exceeding one week’s duration, by country. Relations with Employees (63) EN11 CORE areas of high biodiversity value outside protected areas. Biodiversity Considerations (33)

Description of significant impacts of activities, products, and services on biodiversity in Biodiversity Considerations (33-34) EN12 CORE protected areas and areas of high biodiversity value outside protected areas. Relations with Society (39)

EN13 ADD Habitats protected or restored. Environmental Preservation (35)

81 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 82 Item Item Profile Indication Relevant Page(s) Profile Indication Relevant Page(s)

Our Stakeholders (10) EN14 ADD Strategies, current actions, and future plans for managing impacts on biodiversity. Biodiversity Considerations (33-34) Initiatives in the Six Key CSR Areas: Contribution to Society and Local Communities Number of IUCN Red List species and national conservation list species with habitats in areas (37-38) affected by operations, by level of extinction risk. Human Rights Initiatives (47) EN15 ADD Biodiversity Considerations (33-34) Initiatives Relating to Employee Diversity (49) Initiatives in the Six Key CSR Areas: Key topics and concerns that have been raised through stakeholder engagement, and how Stakeholder Communication (61-62) Amount of land (owned or leased, and managed for production activities or extractive use) 4.17 MM1 Biodiversity Considerations (33) the organization has responded to those key topics and concerns, including through its Relations with Employees (63) disturbed or rehabilitated. reporting. Relations with Shareholders and Investors (64) Relations with Customers (65-66) The number and percentage of total sites identified as requiring biodiversity management plans Relations with Suppliers (67-68) MM2 according to stated criteria, and the number (percentage) of those sites with plans in place. Biodiversity Considerations (33) Examples of Communication with Other Stakeholders (68) Aspect: Emissions, Effluents, and Waste SMM’s Responses to Stakeholder Opinions (77) Initiatives in Global Warming Control (26) EN16 CORE Total direct and indirect greenhouse gas emissions by weight. Material Flows within Business Activity (31) 5. Management Approach and Performance Indicators Initiatives in Global Warming Control (26) Economic EN17 CORE Other relevant indirect greenhouse gas emissions by weight. Material Flows within Business Activity (31) Relations with Society (39-42) Disclosure on Management Approach Strengthening Economic Ties with EN18 ADD Initiatives to reduce greenhouse gas emissions and reductions achieved. Initiatives in Global Warming Control (25-26) Stakeholders (71-72) Aspect: Economic Performance EN19 CORE Emissions of ozone-depleting substances by weight. Initiatives for Reducing Environmental Impact (29) Direct economic value generated and distributed, including revenues, operating costs, Relations with Society (39) EN20 CORE NO, SO, and other significant air emissions by type and weight. Initiatives for Reducing Environmental Impact (27) EC1 CORE employee compensation, donations and other community investments, retained earnings, Strengthening Economic Ties with and payments to capital providers and governments. Stakeholders (71-72) Initiatives for Reducing Environmental Impact (27-28) Financial implications and other risks and opportunities for the organization’s activities due to EN21 CORE Total water discharge by quality and destination. EC2 CORE Risk Management (76) Material Flows within Business Activity (31) climate change. EC3 CORE Coverage of the organization’s defined benefit plan obligations. Strengthening Economic Ties with Stakeholders (71-72) Initiatives for Reducing Environmental Impact (28) EN22 CORE Total weight of waste by type and disposal method. Material Flows within Business Activity (31) EC4 CORE Significant financial assistance received from government. Strengthening Economic Ties with Stakeholders (71-72)

Aspect: Market Presence EN23 CORE Total number and volume of significant spills. Initiatives in Environmental Preservation (24) Range of ratios of standard entry level wage compared to local minimum wage at significant EC5 ADD — Weight of transported, imported, exported, or treated waste deemed hazardous under the locations of operation. EN24 ADD terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste — Policy, practices, and proportion of spending on locally-based suppliers at significant locations Relations with Society (39) shipped internationally. EC6 CORE of operation. Relations with Suppliers (67) Identity, size, protected status, and biodiversity value of water bodies and related habitats EN25 ADD — Relations with Society (39) significantly affected by the reporting organization’s discharges of water and runoff. Procedures for local hiring and proportion of senior management hired and workforce from EC7 CORE Initiatives Relating to Employee Diversity (49) the local community at locations of significant operation. People and Human Rights-related Data (51) MM3 Total amounts of overburden, rock, tailings, and sludges and their associated risks. Initiatives for Reducing Environmental Impact (29) Material Flows within Business Activity (31) Aspect: Indirect Economic Impacts Initiatives in the Six Key CSR Areas: Contribution Aspect: Products and Services Development and impact of infrastructure investments and services provided primarily for EC8 CORE to Society and Local Communities (37-38) public benefit through commercial, in-kind, or pro bono engagement. CORE Initiatives to mitigate environmental impacts of products and services, and extent of impact Initiatives in Creating Products with Relations with Society (39) EN26 mitigation. Low Environmental Impact (32) EC9 ADD Understanding and describing significant indirect economic impacts, including the extent of impacts. — EN27 CORE Percentage of products sold and their packaging materials that are reclaimed by category. Initiatives for Effective Use of Resources (18)

Environmental Aspect: Compliance Initiatives in the Six Key CSR Areas: Effective Use of Resources (15-16) Monetary value of significant fines and total number of non-monetary sanctions for Disclosure on Management Approach Initiatives in the Six Key CSR Areas: Environmental Preservation (21-22) EN28 CORE non-compliance with environmental laws and regulations. Compliance (75) Initiatives in Environmental Preservation (23-24) Aspect: Transport Aspect: Materials Significant environmental impacts of transporting products and other goods and materials EN29 ADD — Initiatives for Effective Use of Resources (18) used for the organization’s operations, and transporting members of the workforce. EN1 CORE Materials used by weight or volume. Material Flows within Business Activity (31) Aspect: Overall Initiatives for Effective Use of Resources (18) EN2 CORE Percentage of materials used that are recycled input materials. Material Flows within Business Activity (31) EN30 ADD Total environmental protection expenditures and investments by type. —

Aspect: Energy Labor Practices and Decent Work EN3 CORE Direct energy consumption by primary energy source. Material Flows within Business Activity (31) Initiatives in the Six Key CSR Areas: EN4 CORE Indirect energy consumption by primary source. Material Flows within Business Activity (31) Respect for People and Human Rights (45-46) Disclosure on Management Approach Initiatives in the Six Key CSR Areas: EN5 ADD Energy saved due to conservation and efficiency improvements. Initiatives in the Six Key CSR Areas: Environmental Preservation (21) Occupational Health and Safety (55-56) Relations with Employees (63) Initiatives to provide energy-efficient or renewable energy based products and services, and Initiatives in the Six Key CSR Areas: Environmental Preservation (21-22) EN6 ADD reductions in energy requirements as a result of these initiatives. Initiatives in Creating Products with Low Environmental Impact (32) Aspect: Employment EN7 ADD Initiatives to reduce indirect energy consumption and reductions achieved. — LA1 CORE Total workforce by employment type, employment contract, and region. People and Human Rights-related Data (51) Aspect: Water LA2 CORE Total number and rate of employee turnover by age group, gender, and region. People and Human Rights-related Data (52) Initiatives in Creating Products with Low Environmental Impact (28) EN8 CORE Total water withdrawal by source. Benefits provided to full-time employees that are not provided to temporary or part-time Material Flows within Business Activity (31) LA3 ADD employees, by major operations. — EN9 ADD Water sources significantly affected by withdrawal of water. — Aspect: Labor/Management Relations

EN10 ADD Percentage and total volume of water recycled and reused. — LA4 CORE Percentage of employees covered by collective bargaining agreements. Relations with Employees (63) Minimum notice period(s) regarding operational changes, including whether it is specified in Aspect: Biodiversity LA5 CORE collective agreements. Relations with Employees (63)

Location and size of land owned, leased, managed in, or adjacent to, protected areas and MM4 Number of strikes and lock-outs exceeding one week’s duration, by country. Relations with Employees (63) EN11 CORE areas of high biodiversity value outside protected areas. Biodiversity Considerations (33)

Description of significant impacts of activities, products, and services on biodiversity in Biodiversity Considerations (33-34) EN12 CORE protected areas and areas of high biodiversity value outside protected areas. Relations with Society (39)

EN13 ADD Habitats protected or restored. Environmental Preservation (35)

81 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 82 Item Item Profile Indication Relevant Page(s) Profile Indication Relevant Page(s)

Aspect: Occupational Health and Safety Number and description of significant disputes relating to land use, customary rights of MM6 local communities and Indigenous Peoples. Relations with Society (39) Percentage of total workforce represented in formal joint management–worker health and LA6 ADD Occupational Health and Safety (57-58) safety committees that help monitor and advise on occupational health and safety programs. The extent to which grievance mechanisms were used to resolve disputes relating to land use, MM7 Relations with Society (39) Rates of injury, occupational diseases, lost days, and absenteeism, and number of customary rights of local communities and Indigenous Peoples, and the outcomes. LA7 CORE Occupational Health and Safety (58) work-related fatalities by region. Aspect: Corruption Education, training, counseling, prevention, and risk-control programs in place to assist LA8 CORE Occupational Health and Safety (57-58) workforce members, their families, or community members regarding serious diseases. SO2 CORE Percentage and total number of business units analyzed for risks related to corruption. Risk Management (76)

LA9 ADD Health and safety topics covered in formal agreements with trade unions. — SO3 CORE Percentage of employees trained in organization’s anti-corruption policies and procedures. Compliance (75) Aspect: Training and Education SO4 CORE Actions taken in response to incidents of corruption. Compliance (75)

LA10 CORE Average hours of training per year per employee by employee category. People and Human Rights-related Data (50) Aspect: Public Policy

Human Resources Development Initiatives (48) SO5 CORE Public policy positions and participation in public policy development and lobbying. Relations with Society (41) Programs for skills management and lifelong learning that support the continued LA11 ADD Initiatives Relating to Employee Diversity (49) employability of employees and assist them in managing career endings. Total value of financial and in-kind contributions to political parties, politicians, and related People and Human Rights-related Data (50) SO6 ADD — institutions by country. — LA12 ADD Percentage of employees receiving regular performance and career development reviews. Aspect: Anti-competitive Behavior Aspect: Diversity and Equal Opportunity Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices SO7 ADD Compliance (75) and their outcomes. Composition of governance bodies and breakdown of employees per category according to LA13 CORE People and Human Rights-related Data (50) gender, age group, minority group membership, and other indicators of diversity. Aspect: Compliance Monetary value of significant fines and total number of non-monetary sanctions for LA14 CORE Ratio of basic salary of men to women by employee category. Initiatives Relating to Employee Diversity (49) SO8 CORE Compliance (75) non-compliance with laws and regulations. Human Rights Aspect: Resettlement

Initiatives in the Six Key CSR Areas: Number (and percentage) of company operating sites where artisanal and small-scale mining Respect for People and Human Rights (45-46) MM8 Human Rights Initiatives (47) Disclosure on Management Approach (ASM) takes place on, or adjacent to, the site Human Rights Initiatives (47) Relations with Suppliers (67-68) Sites where resettlements took place, the number of households resettled in each, and how MM9 Human Rights Initiatives (47) their livelihoods were affected in the process. Aspect: Investment and Procurement Practices Aspect: Closure Planning Percentage and total number of significant investment agreements that include human rights HR1 CORE Human Rights Initiatives (47) clauses or that have undergone human rights screening. MM10 Number and percentage of operations with closure plans. Relations with Society (39) Percentage of significant suppliers and contractors that have undergone screening on HR2 CORE Relations with Suppliers (67) human rights and actions taken. Product Responsibility Total hours of employee training on policies and procedures concerning aspects of human Disclosure on Management Approach Relations with Customers (65-66) HR3 ADD Human Rights Initiatives (47) rights that are relevant to operations, including the percentage of employees trained. Aspect: Customer Health and Safety Aspect: Non-discrimination Life cycle stages in which health and safety impacts of products and services are assessed for HR4 CORE Total number of incidents of discrimination and actions taken. Human Rights Initiatives (47) PR1 CORE improvement, and percentage of significant products and services categories subject to such Relations with Customers (65-66) procedures. Aspect: Freedom of Association and Collective Bargaining Total number of incidents of non-compliance with regulations and voluntary codes concerning Relations with Customers (65-66) PR2 ADD Operations identified in which the right to exercise freedom of association and collective health and safety impacts of products and services during their life cycle, by type of outcomes. Compliance (75) HR5 CORE Relations with Employees (63) bargaining may be at significant risk, and actions taken to support these rights. Aspect: Product and Service Labeling Aspect: Child Labor Type of product and service information required by procedures, and percentage of significant Operations identified as having significant risk for incidents of child labor, and measures PR3 CORE Relations with Customers (66) HR6 CORE Human Rights Initiatives (47) products and services subject to such information requirements. taken to contribute to the elimination of child labor. Total number of incidents of non-compliance with regulations and voluntary codes concerning Aspect: Forced and Compulsory Labor PR4 ADD product and service information and labeling, by type of outcomes. Relations with Customers (66) Operations identified as having significant risk for incidents of forced or compulsory labor, Practices related to customer satisfaction, including results of surveys measuring customer HR7 CORE Human Rights Initiatives (47) PR5 ADD Relations with Customers (66) and measures to contribute to the elimination of forced or compulsory labor. satisfaction.

Aspect: Security Practices Aspect: Marketing Communications

Percentage of security personnel trained in the organization’s policies or procedures Programs for adherence to laws, standards, and voluntary codes related to marketing HR8 ADD — PR6 CORE Relations with Customers (65-66) concerning aspects of human rights that are relevant to operations. communications, including advertising, promotion, and sponsorship.

Aspect: Indigenous Rights Total number of incidents of non-compliance with regulations and voluntary codes concerning PR7 ADD marketing communications, including advertising, promotion, and sponsorship by type of Relations with Customers (66) HR9 ADD Total number of incidents of violations involving rights of indigenous people and actions taken. — outcomes. Total number of operations taking place in or adjacent to Indigenous Peoples’ territories, MM5 and number and percentage of operations or sites where there are formal agreements with Relations with Society (39-40) Aspect: Customer Privacy Indigenous Peoples’ communities. Total number of substantiated complaints regarding breaches of customer privacy and PR8 ADD — losses of customer data. Society Aspect: Compliance Initiatives in the Six Key CSR Areas: Contribution to Society and Local Monetary value of significant fines for noncompliance with laws and regulations concerning PR9 CORE Relations with Customers (66) Disclosure on Management Approach Communities (37-38) the provision and use of products and services. Relations with Society (39) Risk Management (76) Aspect: Materials Stewardship Aspect: Community Initiatives in the Six Key CSR Areas: Effective Use of Resources (15-16) Nature, scope, and effectiveness of any programs and practices that assess and manage SO1 CORE Relations with Society (39) MM11 Programs and progress relating to materials stewardship. Initiatives in Creating Products with Low the impacts of operations on communities, including entering, operating, and exiting. Environmental Impact (32) Relations with Customers (65-66)

83 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 SUMITOMO METAL MINING CO., LTD. CSR Report 2014 84 Item Item CONTENTSProfile Indication Relevant Page(s) Profile Indication Relevant Page(s) Aspect: Occupational Health and Safety Number and description of significant disputes relating to land use, customary rights of Editorial Policy •••••••••••••••••••••••••••••••••• 2 MM6 local communities and Indigenous Peoples. Relations with Society (39) Percentage of total workforce represented in formal joint management–worker health and LA6 ADD Occupational Health and Safety (57-58) Editorial Policy Boundary of the Report safety committees that help monitor and advise on occupational health and safety programs. The extent to which grievance mechanisms were used to resolve disputes relating to land use, Interview with the President •••••••••••••••••••••• 3 MM7 Relations with Society (39) Rates of injury, occupational diseases, lost days, and absenteeism, and number of is report has beencustomary created rights for the of benefitlocal communities of customers, and Indigenous Peoples, andSumitomo the outcomes. Metal Mining Co., Ltd. (SMM) LA7 CORE Occupational Health and Safety (58) work-related fatalities by region. Overview of Business Operations •••••••••••••••• 5 citizensAspect: of Corruption local communities, shareholders, suppliers, The Sumitomo Metal Mining Group Education, training, counseling, prevention, and risk-control programs in place to assist LA8 CORE Occupational Health and Safety (57-58) workforce members, their families, or community members regarding serious diseases. employeesSO2 CORE and allPercentage other stakeholders. and total enumber intention of business was to units analyzed for risks related(consolidated to corruption. subsidiaries)Risk Management (76) Economic Aspects: SMM, consolidated subsidiaries LA9 ADD Health and safety topics covered in formal agreements with trade unions. — provide a clear outline of activities Sumitomo Metal Mining SO3 CORE Percentage of employees trained in organization’s anti-corruption policiesand affiliates and procedures. Compliance (75) SMM Group CSR Co., Ltd. (SMM) is pursuing in order to achieve sustainable Aspect: Training and Education SO4 CORE Actions taken in response to incidents of corruption. Environmental Aspects: SMMCompliance and consolidated (75) co-existence with society and the global environment. subsidiaries LA10 CORE Average hours of training per year per employee by employee category. People and Human Rights-related Data (50) Aspect: Public Policy Corporate Philosophy for a Sustainable Society ••• 7 e articles in this report focus on activities relating to the * From the perspective of significance, we included equity-method application Human Resources Development Initiatives (48) SO5 CORE Public policy positions and participation in public policy development and lobbying. Relations with Society (41) Programs for skills management and lifelong learning that support the continued “Six Key CSR Areas,” which were selected in 2008 after affiliate Nippon Ketjen Co., Ltd., but excluded consolidated subsidiaries with a SixLA11 KeyADD CSR Areas and Vision for 2020 ••••••••••• Initiatives Relating to Employee Diversity (49) employability of employees and assist them in managing career8 endings. Total value of financial and in-kind contributions to political parties, politicians,low environmental and relatedimpact. The following subsidiaries and affiliates have been People and Human Rights-related Data (50) threeSO6 monthsADD of deliberation in six workshops by an — institutions by country. covered. Some statements on Taganito HPAL Nickel Corporation have been CSR Promotion Framework •••••••••••••••••••••• made, but the company is not included in aggregate data as operations started LA12 ADD Percentage of employees receiving regular performance and career9 development reviews. — in-house group of 20 people comprising executive officers Aspect: Anti-competitive Behavior in January 2014. and general managers of Head Office divisions. eir OurAspect: Stakeholders Diversity and Equal••••••••••••••••••••••••••••••• Opportunity 10 Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices SO7 ADD Igeta Heim Co., Ltd., SH Precision Co.,Compliance Ltd., SH Materials (75) Co., Ltd. selection was basedand on their the outcomes. impact those areas have on the Composition of governance bodies and breakdown of employees per category according to SMM Precision Co., Ltd., Ohkuchi Materials Co., Ltd. LA13 CORE People and Human Rights-related Data (50) gender, age group, minority group membership, and other indicators of diversity. companyAspect: Complianceand the extent of related social needs. To Ohkuchi Electronics Co., Ltd., JCO Co., Ltd., Shisaka Smelting Co., Ltd. Shinko Co., Ltd., Sumiko Kunitomi Denshi Co., Ltd., Sumiko Lubricant Co., Ltd. Special Feature 1: The History of the SMM Group ••• 11 determine those needs,Monetary we valueused insightof significant gained fines through and total number of non-monetary sanctions for LA14 CORE Ratio of basic salary of men to women by employee category. Initiatives Relating to Employee Diversity (49) SO8 CORE SumikoTec Co., Ltd., Sumiko LogisticsCompliance Co., Ltd., Sumitomo (75) Metal Mining non-compliance with laws and regulations. Engineering Co., Ltd. Sumitomo Metal Mining Siporex Co., Ltd., Special Feature 2: The Product Creation Spirit regular communication with stakeholders and information Human Rights Aspect: Resettlement Taihei Metal Industry Co., Ltd., Niihama Electronics Co., Ltd., from other sources (e.g. GRI* guidelines and other Niihama Materials Co., Ltd., Nittosha Co., Ltd., Nippon Ketjen Co., Ltd. Leading to the World’s Highest Level Performance •• 13 Initiatives in the Six Key CSR Areas: Number (and percentage) of company operating sites where artisanalJapan and Irradiation small-scale Service miningCo., Ltd., Hyuga Smelting Co., Ltd. Respect for People and Human Rights (45-46) internationalMM8 standards, and trends in civil society). For Coral Bay Nickel Corporation, MalaysianHuman SH Precision Rights Sdn. Initiatives Bhd. (47) Disclosure on Management Approach (ASM) takes place on, or adjacent to, the site Human Rights Initiatives (47) each of the Six Key CSR Areas, we have set a Vision for Malaysian SH Electronics Sdn. Bhd., Sumitomo Metal Mining Pogo LLC Relations with Suppliers (67-68) Sites where resettlements took place, the number of households resettledSumiko in Advanced each, andMaterials how (Suzhou) Co., Ltd. MM9 Human Rights Initiatives (47) Environmental & Social Aspects: 2020, and we createdtheir livelihoodsa roadmap werein 2008 affected that shows in the theprocess. SH Electronics Suzhou Co., Ltd., Suzhou SH Precision Co., Ltd. Aspect: Investment and Procurement Practices course to realize these visions. SH Electronics Chengdu Co., Ltd., SH Electronics Taiwan Co., Ltd. Aspect: Closure Planning Percentage and total number of significant investment agreements that include human rights InitiativesHR1 CORE in the Six Key CSR Areas Human Rights Initiatives (47) Against the backdrop of changing social situations, the clauses or that have undergone human rights screening. MM10 Number and percentage of operations with closure plans. Social Aspects: SMM and Relationsconsolidated with Society subsidiaries (39) Vision for 2020 and its roadmap were revised by the CSR Percentage of significant suppliers and contractors that have undergone screening on HR2 CORE Relations with Suppliers (67) human rights and actions taken. CommitteeProduct Responsibility in May 2012, when the 2012 3-Year Business Effective Use of Resources •••••••••••••••••••••• 15 Publication Date Total hours of employee training on policies and procedures concerning aspects of human Disclosure on Management Approach Relations with Customers (65-66) HR3 ADD Human Rights Initiatives (47) Plan was formulated. is is our report prepared in November 2014 rights that are relevant to operations, including the percentage of employees trained. Environmental Preservation ••••••••••••••••••••• 21 alignmentAspect: Customer with the HealthGRI Sustainability and Safety Reporting Previous publication: November 2013 Aspect: Non-discrimination Contribution to Society and Local Communities ••• 37 Guidelines at an Lifeapplication cycle stages level ofin whichA+. is health declaration and safety is impacts of products andNext services scheduled are assessed publication: for November 2015 PR1 CORE improvement, and percentage of significant products and services categories subject to such Relations with Customers (65-66) HR4 CORE Total number of incidents of discrimination and actions taken. Human Rights Initiatives (47) externally assured. Respect for People and Human Rights •••••••••••• procedures. Aspect: Freedom of Association and Collective Bargaining 45 * Global Reporting Initiative (GRI): An organization established with the Period Covered Total number of incidents of non-compliance with regulations and voluntary codes concerning Relations with Customers (65-66) purposePR2 ofADD creating and promoting international guidelines for Japan: April 1, 2013 - March 31, 2014 OccupationalOperations Health identified and Safetyin which the•••••••••••••••••• right to exercise freedom of association and collective health and safety impacts of products and services during their life cycle, by type of outcomes. Compliance (75) HR5 CORE 55 Relations with Employees (63) sustainability reports bargaining may be at significant risk, and actions taken to support these rights. Overseas: January 1, 2013 - December 31, 2013 Stakeholder Communication ••••••••••••••••••••• Aspect: Product and Service Labeling (Some activities before or after the above period have Aspect: Child Labor 61 Type of product and service information required by procedures, andalso percentage been included) of significant Operations identified as having significant risk for incidents of child labor, and measures PR3 CORE Relations with Customers (66) HR6 CORE Human Rights Initiatives (47) products and services subject to such information requirements. taken to contribute to the elimination of child labor. Total number of incidents of non-compliance with regulations and voluntaryReferenced codes concerning Guidelines EconomicAspect: Forced and Aspects Compulsory Labor PR4 ADD Relations with Customers (66) product and service information and labeling, by type of outcomes.GRI Sustainability Reporting Guidelines, Version 3.0 Operations identified as having significant risk for incidents of forced or compulsory labor, Practices related to customer satisfaction, including results of surveys measuring customer HR7 CORE Human Rights Initiatives (47) PR5 ADD Environmental Reporting GuidelinesRelations with of the Customers Japanese (66) and measures to contribute to the elimination of forced or compulsory labor. satisfaction. Strengthening Economic Ties with Stakeholders ••• 71 Ministry of the Environment (2012 version) Aspect: Security Practices Aspect: Marketing Communications Unless otherwise stated, the term ‘ton’ refers to a metric ton. Percentage of security personnel trained in the organization’s policies or procedures Programs for adherence to laws, standards, and voluntary codes related to marketing HR8 ADD — PR6 CORE Relations with Customers (65-66) Corporateconcerning Governance aspects of human and rights Management that are relevant to operations. communications, including advertising, promotion, and sponsorship. Aspect: Indigenous Rights Total number of incidents of non-compliance with regulations and voluntaryEnquiries codes concerning Aspects PR7 ADD marketing communications, including advertising, promotion, and sponsorshipPR & IR Department, by type of SumitomoRelations Metal with Mining Customers Co., (66)Ltd. HR9 ADD Total number of incidents of violations involving rights of indigenous people and actions taken. — outcomes. 11-3, Shimbashi 5-chome, Minato-ku, Tokyo 105-8716, Total number of operations taking place in or adjacent to Indigenous Peoples’ territories, MM5 and number and percentage of operations or sites where there are formal agreements with Relations with Society (39-40) Aspect: Customer Privacy Japan Corporate GovernanceIndigenous Peoples’•••••••••••••••••••••••••• communities. 73 Total number of substantiated complaints regarding breaches of customerTel: 81-3-3436-7705 privacy and Fax: 81-3-3434-2215 PR8 ADD — losses of customer data. ComplianceSociety •••••••••••••••••••••••••••••••••••• 75 Aspect: Compliance Initiatives in the Six Key CSR Areas: Photographs on This Page ••••••••••••••••••••••••••••••• Risk Management 76 Contribution to Society and Local Monetary value of significant fines for noncompliance with laws andTaganito regulations HPAL concerning Nickel Opening Ceremony PR9 CORE Relations with Customers (66) Disclosure on Management Approach Communities (37-38) the provision and use of products and services. Built under the Taganito Project being promoted on Relations with Society (39) Risk Management (76) Aspect: Materials Stewardship Mindanao Island in the Philippines, the HPAL plant was completed and an opening ceremony held locally on SMM’sAspect: Community Responses to Stakeholder Opinions ••• 77 Initiatives in the Six Key CSR Areas: September 2013. The ceremonyEffective was Use widely of Resources attended (15-16) by Nature, scope, and effectiveness of any programs and practices that assess and manage SO1 CORE Relations with Society (39) MM11 Programs and progress relating to materials stewardship. representatives from the PhilippinesInitiatives ingovernment, Creating Products local with Low the impacts of operations on communities, including entering, operating, and exiting. Environmental Impact (32) Independent Assurance Report •••••••••••• 78 government, and the constructionRelations work. with Customers (65-66)

GRI Content Index ••••••••••••••••••••••••••• 79

0183SUMITOMOSUMITOMO METAL METAL MINING MINING CO., CO.,LTD. LTD. CSR CSRReport Report 2014 2014 SUMITOMOSUMITOMO METAL METAL MINING MINING CO., CO.,LTD. LTD.CSR CSRReport Report 2014 201402 84 SUMITOMO METAL MINING CO., LTD. CSR Report 2014

CSR Report 2014

SUMITOMO METAL MINING CO., LTD.

Head Office: 11-3, Shimbashi 5-chome, Minato-ku, Tokyo 105-8716, Japan Tel: +81-3-3436-7705 Fax: +81-3-3434-2215 Website: http://www.smm.co.jp/E/

The following environmental considerations were applied to the printing of this report: SUMITOMO METAL MINING CO., LTD. • The report uses paper certified by the Forest Stewardship Council (FSC) and made with wood from FSC-certified forests. • The report is printed using vegetable oil-based ink